International policies to promote cooperative housing

Carles Baiges, Lacol Mara Ferreri, igop-uab & northumbria university Lorenzo Vidal, igop-uab & cidob Promou:

Impulsat per:

Amb el finançament de:

Amb la col·laboració de: This publication has been made possible thanks to the support of the Generalitat de Catalunya in the framework of the Subsidy for Singular Projects, the network of Ateneus Cooperatius and Aracoop projects, promoted by the Department de Treball, Afers Socials i Famílies, and funded by the Ministeri d’Ocupació, Migracions i Seguretat Social-Servei Públic d’Ocupació Estatal.

Edition Authors La Dinamo Fundació Carles Baiges, Mara Ferreri and Lorenzo Vidal. Carrer del Masnou, 32 08014 Barcelona Of the case studies: ladinamofundacio.org Carles Baiges (The Netherlands), Eduard Cabré (New York), Mara Ferreri (United Kingdom), Max Gigling Lacol SCCL (Quebec), Ernst Gruber (Austria), Lorenzo Vidal (Uruguay Carrer Ciceró, 5 local and Denmark), Corinna Hölzl and Tobias Bernet 08014 Barcelona (Germany), Luisa Rossini (Lazio) and Claudia Thiesen lacol.coop (Switzerland).

Illustrations Anna Gran @annagran_

Graphic design Croma Studio croma-studio.com 6 8 Introduction 7 La Dinamo Fundació and Lacol

10 Comparative analysis Carles Baiges, Lacol Mara Ferreri, IGOP-UAB & Northumbria University Lorenzo Vidal, IGOP-UAB & CIDOB

36 Case studies

38 Germany Corinna Hölzl and Tobias Bernet 44 Austria Ernst Gruber 52 Denmark Lorenzo Vidal 58 Lazio (Italy) Luisa Rossini 66 New York (USA) Eduard Cabré 72 The Netherlands Carles Baiges 80 Quebec (Canada) Max Gigling 96 United Kingdom Mara Ferreri 104 Switzerland Claudia Thiesen 112 Uruguay Lorenzo Vidal

Introduction 9 La Dinamo Fundació and Lacol

he following text is the extension of an article La Dinamo Foundation is an entity born in mid-2016, from included in the publication, “Impuls de les the experience of La Borda housing cooperative, dedicated Tcooperatives d’usuàries d’habitatge. Per a una política to promote cooperative housing in Catalonia. We do this pública cooperativa d’accés a l’habitatge a Catalunya” through the support and promotion of new projects, the (“Promoting User Housing Cooperatives. For a cooperative dissemination and research, and the promotion of inter- public policy on access to housing in Catalonia”), published operation and the promotion of public policies to strength by La Dinamo Foundation and Lacol cooperative. It is the model. part of a larger project titled “Towards the scalability of cooperative housing through cooperative-public Lacol is an architecture cooperative, specialized in collaboration” which aims to contribute to the integration consulting on the field of public housing policies, and in and enhancement of housing cooperativism within the promoting housing cooperatives especially in the field of public policy system in Catalonia. This publication has been participatory design and the support in the construction made possible thanks to the support of the Generalitat de process. Catalunya in the framework of the Subsidy for Singular Projects, the network of Ateneus Cooperatius and Aracoop You can find the full research (in Catalan) in: projects, promoted by the Department de Treball, Afers ladinamofundacio.org/recursos/#impuls Socials i Famílies, and funded by the Ministeri d’Ocupació, Migracions i Seguretat Social-Servei Públic d’Ocupació Estatal. Aerial image of Montevideo (Uruguay) Source: Wikimedia International policies to promote cooperative housing comparative Carles Baiges, Lacol analysis 11 Mara Ferreri, igop-uab & Northumbria University Lorenzo Vidal, igop-uab & cidob

This article is based on a comparative analysis of case studies Tobias Bernet and Helga Ring (Germany), Luisa Rossini as part of a project led by La Dinamo Fundació and Lacol, and Emanuela Di Felice (Italy), and Claudia Thiesen in collaboration with the Barcelona Centre for International (Switzerland). Affairs (CIDOB) and funded by Projectes Singulars. What do we mean by cooperative housing? his study offers an international review of the legal Cooperativism in housing has yielded considerably tools and public policies available to different levels heterogeneous sectors in regard to size, historical trajectory, Tof government to promote housing cooperativism. tenure models and institutional and organizational forms. It focuses specifically on tools that bolster affordability This research is focused on models of cooperativism that and the decommodification of such housing models. The meet two key conditions: firstly, that residents are, at least study develops a multi-level and long-term approach to nominally, collective ‘owners’ of their homes and, secondly, the housing life cycle, bringing together policies that shape that such homes cannot be purchased or sold on the free the production phase, impact housing management, and market. In other words, models in which home-ownership focus on maintaining the model over time. It is based on remains in the hands of the cooperative and residents the analysis of case studies of cities, regions and countries cannot individually capitalize on the market value thereof. where public policies have played a significant role in the This definition includes rental models and models in which promotion of housing cooperativism. The case studies were members have a stake in the cooperative’s equity; models undertaken by the following researchers: Carles Baiges with a large degree of self-management and others that are (Holland), Eduard Cabré (New York), Mara Ferreri (United highly professionalized; models that are very closely aligned Kingdom), Max Gigling (Quebec), Ernst Gruber (Austria), with the social and public housing sectors and others that Lorenzo Vidal (Uruguay and Denmark), Corinna Hölzl, are completely autonomous. The concept of ‘zero-equity’ or comparative ‘limited-equity’ cooperative housing models are often used In short, we are now witnessing a new wave of public- analysis to encompass these different experiences. In Catalonia, cooperative initiatives in the housing sector, which could 12 to varying degrees, we can find similarities between these include Catalonia. The history of housing cooperativism in models and the emerging sectors of cooperative housing ‘en these countries offers important ideas and lessons towards cessió d’ús’. this aim.

The objective of this study is not to examine the specific Impact of public policy features of different cooperative housing models, but While this study does not enter into a detailed analysis of rather the legal frameworks and public policies in force the effects of public policies in each country, it is clear that to keep such housing affordable and decommodified. In government support has had an impact on the different other words, it aims to identify and compare public policy phases of cooperative housing. Let’s take three countries as interventions that enable cooperatives to become a tool an example. for achieving housing as a right and as a real alternative to speculative real estate dynamics. In Denmark, Almen “common” housing experienced exponential growth after 1946, when it was featured in Opportunities for public policy intervention at public policies as a central tool for the working class to different levels access housing. Likewise, the number of Andel cooperatives While in some cases most public policy interventions increased following legislative changes in the 1970s that are developed at the municipal level, in others, they are granted tenants pre-emption and first-refusal rights to form introduced at the regional or even national scale. The a cooperative, and following the introduction of financial tools used during the different stages of the housing life aid in 1981.1 cycle, in any case, cannot be taken in isolation, but should be understood as part of a policy framework capable to 1973 1989 2008 2013 2017 provide a comprehensive response to the particularities of 69 366 581 1650 2142 each context. In some countries reviewed, the cooperative Number of housing cooperatives in Uruguay per year.2 housing sector took root during the early 20th century, while in others it did not consolidate until the 1970s. Both In Uruguay, housing cooperativism began in the years periods stand out as phases of a general expansion of following the establishment of a specific legal framework in cooperative housing practices and policy-making. Since

2000, and particularly after the financial crisis of 2007- 1 «Asociaciones y cooperativas de vivienda en Copenhague y Dinamarca». Text written for 2008, a third period of expansion can be identified in most the section «Análisis de experiencias nacionales e internacionales» of the R&D Project «Cooperhabitar: claves para la generación de procesos cooperativos que aseguren el of the countries featured in this study and internationally. derecho a una vivienda digna en Andalucía». the 1968 National Housing Act. The movement was brought institutional and economic processes all make housing comparative to a halt during the dictatorship (1973-1985), but finally cooperativism geographically singular. Moreover, the analysis flourished since the late 1980s. In recent years, policies quantitatively marginal nature of housing cooperatives 13 supporting cooperatives have led to an exponential growth often leads to their neglect in national official statistics of cooperative initiatives (La República 2018). The 2010- and reports. To date, few transnational overviews have 2014 National Housing Plan funded a total of 9,697 homes been undertaken by international organizations such as for 300 cooperatives, and the 2015-2019 Plan aims to create Cooperative Housing International, and it is only in recent 10,000 more.3 years that attempts have been made to review and compare the progress made in resident-led housing provision, Similarly, around half of all housing cooperatives in the increasingly under the umbrella of ‘collaborative housing’ United Kingdom were established between 1977 and (Lang et al. 2018; see also Special issue 2018). 1987, during a period of public support for the model, for example by creating the Cooperative Housing Agency, in This study offers a modest contribution to this burgeoning 1976.For example, in 1976, the central government created transnational literature by identifying and comparing the Cooperative Housing Agency to promote the growth of different typologies of public support for user-led housing cooperatives. cooperative housing, under what we term public- cooperative mechanisms. Methodology of the study Transnational comparisons of housing systems are complex In the selection of case studies, the study chose and always require some explanation of methodology. a wide angle in order to explore a variety of the There exist multiple barriers to comparative housing public‑cooperative mechanisms available, rather than research, including issues with data availability, the following a strict, best practice approach. Therefore, presence – or absence ­– of sustained academic housing alongside mainstream and well-established cooperative study and different definitions of tenure, affecting even housing systems, such as those in Uruguay or Quebec, the mainstream categories such as social housing (Scanlon study has also included relatively marginal, experimental et al. 2014). These general difficulties are only further or short-lived programmes, whose impact on both housing exacerbated in the study of cooperative, collaborative and provision and policymaking are difficult to assess, but community-led housing and their relationship to public which nonetheless present interesting and relevant policy. Diverse national histories, scales, legal frameworks, approaches. These 10 case studies were chosen based on a combination of existing academic and housing sector literature reviews and prior knowledge and expertise. 2 & 3 See www.cudecoop.coop/cudecoop/las-cooperativas-en-uruguay/ and www. universidad.edu.uy/libros/opac_css/doc_num.php?explnum_id=323. They include contemporary and historical policies and comparative programmes and are geographically heterogeneous, from of maintenance over time thus runs across both issues of analysis state‑wide overviews to regional or municipal examples. production and access and management, revealing the 14 This heterogeneity reflects the diverse levels of housing strengths and weaknesses of different models. and planning governance, as well as the different degrees of maturity and integration of cooperative housing In the second phase of the study, data from the 10 case policymaking across different levels of governance. studies was compiled in a comparative table and examined. The three-month iterative process of analysis included In the first phase of the research, 10 individual case studies careful translation between different languages, definitions were identified and commissioned. In-depth knowledge of tenure, and legal and policy frameworks. Further of relevant policy mechanisms was prioritized over clarifications were sought and details added to better any attempt at exhaustiveness regarding each national understand national and regional peculiarities, as well as co-operative housing or planning frameworks, although the position of co‑operative housing in relation to the wider each case study includes a contextual introduction. As can housing and planning systems, and to ensure comparability. be observed in the annex, policy tools and mechanisms The thematic comparative analysis was organized are described in a series of short paragraphs that follow according to the categories collected in the table at the end. three thematic categories, or ‘moments’, in the public- cooperative process: production, access and management, A long-term perspective on the housing life cycle and maintenance over time. Wherever possible, each Emphasis is often placed on the production phase of study identifies the level of governance and policymaking, cooperative housing; while construction is a key moment, distinguishing between municipal, regional and/or national it is not the only stage that defines a model’s distinguishing and offers references to concrete examples of legislation or features. Rather, it is also necessary to take a long-term housing programmes. view and understand the frameworks that, over time, regulate access and use, as the pressures of privatization As outlined in the introduction, we placed particular and commodification pose a constant threat. With this in emphasis on the third moment, as necessary for a long-term mind, we have grouped relevant public policies and legal perspective. Longitudinal studies of cooperative housing frameworks into three different moments or phases of the sectors across the world, such as in Denmark (see Larsen housing process: 1) production, 2) access and management, et al. 2015), Uruguay (Vidal 2019) and Puerto Rico (Morales and 3) maintenance of the model over time. Although we 2018) have shown that the creation of mechanisms to avoid use the term ‘moment’ or ‘phase’, it is important to point commodification is paramount to maintain cooperative out that they are often not separate and clearly defined housing as an accessible and affordable alternative to periods of time, in fact they may even overlap. Each phase market housing. Rather than a separate moment, the issue deals with different policy areas and measures. Areas of influence and tools of public policy open to a wider public. They can also improve the long- comparative term affordability of cooperative housing by granting analysis 15 1. Production subsidies for low-income residents and by providing 1.1. Access to land and buildings financial assistance for maintenance and renovation. 1.2. Financing​ 1.3. Direct subsidies 3. Maintenance of the model over time. Regulations 1.4. Indirect subsidies may be introduced to limit the possibility of realizing 1.5. Technical support profit or accumulating individual equity. Public authorities can also create barriers to members or other interested 2. Access and management parties tempted to capitalize on the exchange value of the 2.1. Regulation on access to the cooperative housing stock cooperative housing. 2.2. Subsidies to maintain affordability

3. Maintenance of the model over time 3.1. Regulations restricting housing equity and the commodification of dwellings

Public policy interventions in each of the three moments can affect the outcomes of cooperative housing projects:

1. Cooperative housing production. Public authorities can promote the production of new cooperatives and new cooperative housing through measures that grant access to land, buildings, funding, financial resources and/or technical support. Such factors affect the overall initial cost of housing projects and, thus, their initial affordability. Moreover, they bear considerable weight on the scale and replicability of cooperative housing developments.

2. Access and management. Public administrations can influence regulations on access to the cooperative housing stock to prevent potential nepotism and to keep the sector comparative Findings on social and environmental sustainability criteria. analysis The city of Munich has specific tender procedures for 16 1. Cooperative housing housing cooperatives. In Austria, Italy and some Swiss production municipalities, housing cooperatives can also purchase public land at a lower price to develop affordable housing. In this section, we identify the different tools used by public administrations to create new housing cooperatives in their One example of a systematized sale of public assets to cities and regions: 1) access to land and buildings, 2) access cooperatives is Uruguay, through the Portfolio of Properties to funding, 3) direct subsidies, 4) indirect subsidies and 5) for Social Interest Housing (CIVIS). Cooperatives interested technical support. in purchasing public land and/or property can submit a proposal to the regular calls held by the Ministry of 1.1. Access to land and buildings Housing (MVOTMA). Among the different types of housing Access to land and/or buildings for new developments is a developers that can apply for such tenders, priority is given to major expense when founding housing cooperatives. Public cooperatives, which can obtain up to 50% of total allocations support mechanisms can be grouped into the following (Mendive 2013). Their proposals are evaluated by technicians types: a) the sale or b) lease of public land for new housing from the National Housing Directorate. Allocation criteria cooperative developments; c) policies that support the are based on the cooperative’s architectural and planning transformation of existing buildings through rehabilitation proposal, as well as on its development and stability over programmes or d) through the transfer of existing public or time, which includes members’ heterogeneity, social and social housing to the cooperative sector; e) reserving land educational activities and the seniority of the project. A or housing in new urban developments and f ) pre-emption similar ‘portfolio’ has been established at the municipal scale and first-refusal rights. in the capital Montevideo.

a) Sale of public land Demand for public land is a constant of cooperative There are several models for the sale of public land to movements in Uruguay establish new housing cooperatives. In Germany, for Source: Montecruz example, in municipalities such as Hamburg, Berlin, Freiburg, Tübingen and Munich, it is possible to purchase public land for the development of community housing (at a minimum for groups of 3 houses; 20 homes on average). Public land is transferred through Konzeptverfahren and Konzeptvergabe: competitive tender processes based b) Lease of public land and property c) Activation of new cooperative projects through the comparative In several countries, preference goes to keeping land in rehabilitation of existing housing stock analysis public ownership and offering a leasehold to cooperative 17 projects. In Austria, land can be transferred in this way to In some contexts, local governments have promoted the affordable housing developers. In the case of Vienna, the City transfer of existing public and private buildings in need Council has created a limited-profit organization for house of maintenance to housing cooperatives. New York City building and urban regeneration (wohnfonds_Wien) which has promoted public programmes that provide support purchases public and private land to guarantee plots in for public and private tenants who want to purchase their strategic areas and sets calls for tender for the construction building and manage it as a cooperative with the backing of new social housing, including cooperative housing. of an external entity. Examples include the Affordable Neighborhood Cooperative Program and the Third Party In Italy, local governments can make use of urban planning Transfer Program. These programmes include public aid tools to create affordable and social housing zones on public for rehabilitation in exchange for maintaining housing land or land that has been expropriated to this purpose. affordability for a fixed period, which is calculated Land is then transferred through leasehold, generally in relation to the amount of subsidy received. Such lasting 99 years. In Germany, public land is being leased programmes are often focused on small, multifamily at the municipal level for the first time, for example in buildings for rent that are very expensive and difficult to Hamburg. Federal legislation establishes a minimum term manage by municipal housing agencies. of 30 years and a maximum of 99, at the end of which, if the leasehold agreement is not renewed, cooperatives can apply Some rehabilitation and cooperativization programmes for compensation or other favourable options, such as pre- have included buildings occupied by squatters. In Italy, in emption and first-refusal rights. 1998 the regional government of Lazio approved the Law of Cooperative auto-recupero (self-refurbishment), which In Holland, most local governments use an unlimited lease provided support for the rehabilitation and transformation model (erfpacht), with ground rent that is either fixed into cooperative housing of 11 vacant public buildings or adjusted every 50 to 75 years, for developing not-for- and a convent in Rome. Most of the 249 homes had been profit housing. In recent years, the city of Amsterdam has squatted for a long time. In the United Kingdom, between employed this model to promote four new cooperative the end of the 1960s and 2000s, municipal governments housing developments. 4 In Quebec, the Quebec Housing had programmes to temporarily transfer badly maintained Society (SHQ), a regional public body, and local authorities 4 These housing cooperatives, built in 2017, are located on Centre Island, in the East can lease public buildings to cooperatives for a minimum (Archimedesplantsoen) and in the South (Havenstraatterrein). Following a motion by the period of 50 years and for a fixed rent. City Council, a fourth location in Noord (Elzenhagen Zuid) was added (Platform31 2018). comparative buildings –many of which had been squatted– to mutual such groups, but must give them a chance: six months are analysis housing cooperatives known as “short-life”. These were granted to discuss the possibility of becoming a cooperative 18 especially common in London, where by the mid-1980s and resources are offered (€5,000 minimum) to develop a 15,000 people were housed through this model (Bowman cooperative plan. One way to make such an acquisition is 2004). While many have dissolved over time, one of every through the purchase of shares. A limited company (B.V.) four existing mutual cooperatives in the city has its roots in is created to purchase the residential complex and then the “short-life” model. the housing cooperative gradually purchases shares to gain more control. This mechanism can also be used to build d) Transfer of existing public or social housing to the new cooperative housing (B.V. constructie), with housing cooperative sector associations participating as shareholders. The cooperative Another possible route is to transfer the management or achieves total control when it owns more than 50% of the property the public or social housing stock to housing shares.5 cooperatives. In the United Kingdom, tenant management organizations were founded following the introduction of e) Reserving land or housing in new urban the right to manage in 1994. This is a model in which tenant developments groups and non-governmental housing associations can Another common mechanism to support the establishment manage publicly-owned housing. Today, more than 62,000 of new housing cooperatives is to make it compulsory to rented social housing units are managed by approximately reserve land and/or housing for this purpose in new plans 170 organizations, which are generally considered part of and building developments. This is practiced in the province the cooperative sector. Some stock was also transferred of Tyrol, in Austria, and in Holland, after the approval of the through the Community Gateway Model, developed by Spatial Planning Act in 2008. In Denmark, local governments the cooperative housing movement and locally controlled can force new private developments to reserve 25% of their by residents, who have the right to become members by space for common housing (Almen). In Germany, some paying a nominal £1 fee. There are four Community Gateway municipalities reserve a percentage of land for cooperatives, Associations in England, which manage more than 24,000 for instance in Freiburg and Hamburg, where a 2018 social homes. municipal ordinance established that 20% of the land in new developments had to be reserved for Baugemeinschaften In Holland, the 2015 Housing Act established a framework (cooperatives and foundations). In the district of for housing associations that supports existing groups of Wilhelmsburg, for example, 1,200 out of 5,000 homes in a tenants who wish to form a housing cooperative and become collective owners of the buildings in which they live. The 5 Cooplink Kennisnetwerk Wooncoöperaties housing association is not obliged to sell its properties to www.cooplink.nl/wiki/B.V._constructie. In newly built neighborhoods, such as Erhaltungssatzung and Milieuschutz), which they usually comparative Wilhelmsburg (Hamburg), analysis 20% of new homes are exercise in favour of municipal housing associations, reserved for cooperatives. including cooperatives and shared housing projects. 19 Source: Hosoya Schaefer Architects / agence ter / iba 1.2. Access to financing Access to financing is essential to ensure that projects are economically viable and affordable. Public support usually takes the form of a) public lines of credit or b) guarantees. In some cases, administrations contribute to the initial equity required by cooperatives, which facilitates access to new development will be reserved for Baugemeinschaften, to private financing. be put out to tender in 2020 (IBA Hamburg 2018). a) Public lines of credit f) Pre-emption rights and rights of first refusal The most direct way to fund cooperative projects is through financing from banks and/or public institutions. The last mechanism used to access land or buildings for the creation of cooperative housing consists of pre- In Uruguay, once cooperatives have been allocated land, emption rights and the right of first refusal. In Denmark, they can access public funding by participating in lotteries since 1976, the law grants tenants pre-emption rights organized by the Ministry of Housing twice a year. If a over their homes if they form a cooperative. At least 60% cooperative is unsuccessful for two consecutive times, it is of tenants in the property must be in favour of forming a automatically granted a loan on the third attempt. There cooperative under this system.6 In southern Austria, local is also a line of credit to help new members cope with the governments may use their pre-emption right over land initial down payment (the funding scheme for projects in to offer it to limited-profit housing developers (including Uruguay is designed so that this down payment will increase cooperatives) at a lower cost. In Germany, pre-emption over time). These loans cover 85% of total costs for a 25-year rights have also been used by tenants to purchase property term at a 5% interest rate (FUCVAM 2017). and establish the housing organization Miethauser Syndikat.7 The main necessary condition is that the 6 Almenboligloven Act, Chapter II property be located in ‘social conservation’ areas (Soziale www.retsinformation.dk/Forms/R0710.aspx?id=203465.

Erhaltungsgebiete). Under certain circumstances, local 7 For example, Miethauser Syndikat (n.d.) Projekt Seume 14 and Projekt Z48 Kreuzberg e.V., governments have pre-emption rights in areas designated available at: www.syndikat.org/de/projekte/seume14/ and www.syndikat.org/de/projekte/ z48-kreuzberg-e-v/ for “the protection of social composition”(Soziale comparative In Germany, city-states such as Berlin or Hamburg provide costs can be financed through low-interest loans backed analysis zero-interest loans for new developments or to purchase by the local public administration. Cooperatives can also 20 buildings. As is the case in Uruguay, they also offer zero- receive guarantees from the national government, under the interest or very-low-interest loans for members to make the supervision of the Ministry of Infrastructure. initial down payment (Berlin Senat). For example, IFB, the public bank in Hamburg, offers loans up to €25,000 with a In Holland, there are public guarantees for senior low-interest rate and for a 20-year term (IFB Hamburg 2019). co-housing projects, which can include cooperatives. They offer a guarantee of up to 90% of the loan during In Austria, Vienna offers between €510 and €700 per m² the development phase of the project and of 15% during with a 1% interest rate. While it is available to cooperatives, construction. Up to 50 projects can be backed per year, for a in practice most developers that use it are limited-profit maximum of €164.4 million.8 entities, possibly due to the complexity of the process. Since 2011, the city has sold municipal plots under a plan known 1.3. Direct subsidies as Wohnbauinitiative, which offers ‘bullet loans’ of €80 per Financial support in the form of subsidies is the most direct m², with an interest rate of 3.9% for 10 years, which means type of support for cooperative projects. In some cases, that repayments are interest-only for most of that time. there are specific subsidies for the cooperative model alongside more general subsidies for the affordable and b) Public guarantees social housing sector. Another way to support the financing of cooperative housing is to offer guarantees so that projects can access In Denmark, for example, a programme that ran from 1981 favourable loans through ethical or cooperative banks, or on to 2004 offered subsidies for up to 10% of the initial cost the private market. of cooperative (Andel) projects. Today, local governments still provide 14% of initial capital to new common housing In countries such as Denmark, local governments offer developments (Almen). guarantees to cooperatives that wish to request a loan to purchase or build new housing. In New York, cooperatives In Holland, there are no specific subsidies for cooperatives, can receive guarantees by municipal, state and federal but there exists financial support for self-build projects entities. Quebec offers a public guarantee for 35 year loans, which are usually signed with a cooperative bank. 8 «Stimuleringsregeling Wonen en Zorg» (s.d.) in Cooplink Kennisnetwerk Wooncoöperaties In Austria, local governments of municipalities such as www.cooplink.nl/nieuws/stimuleringsregeling-wonen-en-zorg. Vienna offer second mortgages, that is, mortgages on 9 Gemeente Amsterdam (s.d.) Subsidie Duurzame zelfbouw. www.amsterdam.nl/veelgevraag houses that are already mortgaged. In Italy, unsubsidized d/?productid=%7BA6E63C76-EE62-4CA6-BA84-AC8B1EEDEDB0%7D. that apply sustainability measures. The local government 1.4. Indirect subsidies comparative of Amsterdam offers €3,000 per house with an energy Due to the type of membership and the non-profit nature analysis certificate lower than 0.25 EPC, and €5,000 if lower than of housing cooperatives, they are often exempt from paying 21 0.15. The maximum subsidy per building is €200,000.9 certain taxes, such as property taxes, as in Uruguay and Regions such as Gelderland also offer subsidies for self- Denmark, and corporate taxes, as in Quebec and Austria. In build projects: €2.000 to establish the group, €10,000 to Holland, there is a formula that supports small cooperative prepare a new built project and €12,500 in the case of developments by granting them an exemption on the ‘lease existing buildings (Gelderland 2016). tax’ for their first 50 homes (Platform31 2018). This and other types of tax exemptions for housing cooperatives are In Germany, the city-state of Hamburg offers general present in most of the cases studied. subsidies and other additional support depending on the characteristics of the project. There are specific subsidies 1.5. Technical support for projects that meet energy efficiency criteria, remove In most of the cases, public authorities play a role in the architectural barriers, create public or neighbourhood provision of technical support to cooperatives, ranging from spaces, install elevators or parking places, promote information and training to technical assistance, either in car-sharing for residents, provide charging points for the form of subsidies or through public services or, at the electric cars and bike parking, build compact housing, use very least, by defining the requirements for such support. compact construction, integrate at-risk groups, or provide emergency housing (IFB Hamburg 2019). In England and Wales, the Housing and Planning Act 2016 introduced the ‘right to build’; local authorities are legally In the case of Quebec, up to 50% of the mortgages can be obliged to maintain a register of groups that want to build converted into non-refundable subsidies for cooperatives their own homes on public or private land, and include this that meet specific criteria. Another important point worth in local planning. In Vienna, the Gebietsbetreuungen are mentioning is that to access the different subsidies offered multi-disciplinary teams created and designed by the City by the AccèsLogis programme, cooperatives must have Council to serve as local coordinators responding to the initial capital representing 15% of development costs needs of residents, sometimes facilitating interaction with (or 5% if specific aspects of economic viability can be teams that offer technical support. In Austria, technical demonstrated). This initial contribution, however, is not assistance for loan recipients focuses on compliance with required from residents, but often from the city council administrative issues. In large development projects there (Montreal has an agreement on this, for example) or other is also technical support available for matters such as public entities. mobility and open spaces. In New York, there are training programmes on how to manage housing projects. In Almere comparative (Holland), there is an advisory point for self-build housing analysis developments, although it is not aimed exclusively at 22 cooperatives.

In some countries, support is provided directly by independent professionals but regulated by the State. The administration in Quebec recognizes Technical Resource Groups (GRT) after verifying that they meet specific technical requirements. Remuneration for GRT is limited by the administration and paid for by the cooperative, which can request a public subsidy to cover such costs. Similarly, in Uruguay, the Technical Assistance Institutes (IAT), multi-disciplinary non-profit teams, are regulated by law. Groups that opt for public land and loans are obliged to hire support of this kind, but the cost of their services may not exceed 5% of the total cost of the project. Another relevant example is England, where Community-led Housing Hubs have been recently created. These are advisory agencies for new community housing projects, by local governments and by the national Community Housing Fund (Community- led Housing), which covers professional support, viability studies and assistance in finding land. comparative analysis 23

Draw of public loans for cooperatives in Uruguay Source: mvotma comparative 2. Access and management publicly supported, although these arrangements could analysis Public administrations may implement regulations on the not represent more than 10% of the cooperative’s total 24 cooperative housing stock to influence its demography housing.10 These units had to be used to resolve urgent and promote its affordability. Two main tools stand out: 1) municipal housing needs or to create a more balanced regulations on access to the cooperative housing stock and mix of residents in general. In Vienna, in cooperative 2) subsidies to maintain housing affordability. developments that receive housing subsidies, one third of all flats are allocated by the administration to households 2.1. Regulation on access to the cooperative housing on municipal housing waiting lists. stock Regulations on access to cooperative housing is important In some countries, quotas for low-income households regardless of whether cooperative projects receive direct are linked to specific subsidies for construction or subsidies or not. A series of mechanisms to guarantee rehabilitation. In Holland, new cooperative developments accessibility and oversee eligibility criteria exist: a) reserves receive a discount on the price of land if they include social of housing units for social renting and b) regulations on housing units.11 waiting lists and the transfer of housing units. Some German cities also offer municipal credit for a) Reserve of housing units for social renting units reserved for low-income residents, such as Many public administrations provide support for the zero-interest loans in Berlin (Neubauförderung and development of cooperative housing if projects reserve Genossenschaftsförderung). In Hamburg, a portion of new some of their housing units for low-income families. This cooperative developments is reserved for social housing is accomplished by placing income limits on some new applicants. Income categories are used to prevent segregation development units, often reserved for people on social and promote social mix in new developments. Income levels housing registers or considered socially vulnerable. In many and composition are reviewed every five years. Different European countries, accessibility is promoted through quotas are set based on the income category, ranging from quotas, that is, by reserving a certain percentage of a a minimum of 30% to a maximum of 45% of the social mix. cooperative development for social rented housing. In small cooperatives built using public subsidies, this

In Denmark, 25% of common housing (Almen) is reserved 10 Almenboligloven Act, Chapter 11a. Private housing cooperatives with support (cancelled for households and persons on the municipal social in 2004). Subsection 4, PCS 4.

housing register. Moreover, until 2004, local governments 11 For example, the Amsterdam Center Island Pilot Housing Cooperative receives a discount could also purchase a share or rent units that ended up on the price of land of €361 per m² of surface area allocated to social renting (excluding VAT) (Gemeente Amsterdam, n.d.). vacant in housing cooperatives (Andel) that had been percentage must be maintained for the entire duration of New members of housing cooperatives can come from comparative the subsidy (20 years minimum) and applies to new housing different waiting lists. In Denmark, access to 75% of analysis allocations in the case of population changes. common housing (Almen) is granted through an open and 25 transparent waiting list managed by the association, while b) Norms over the functioning of waiting lists and the the local government has its own social housing registry to transfer of leases cover the remaining 25%. In the United Kingdom, housing To understand accessibility to cooperative housing, it cooperatives decide on new residents autonomously is essential to analyze eligibility criteria and selection through direct application. If the organization has received mechanisms for new members. Public administrations often public aid, however, it must also accept people from establish socioeconomic criteria for access but can leave municipal waiting lists. cooperatives varying degrees of autonomy in the selection of new members. In the province of Tyrol, in Austria, 85% of homes built through the €5 per m² model (the highest rent price In New York, for example, when a housing unit becomes for this type of social housing) are allocated through a available in a cooperative that has received public funding municipal register, while the remaining 15% is based on from the Affordable Neighborhood Cooperative Program, a regional register. In Vienna, eligibility criteria related it must be offered to households with an income between to income include 80% of the population to ensure a 80% to 120% of the area average income. In Austria, social mix. In addition to applicants on the project’s own eligibility for access to subsidized housing is set at the waiting list, there is another waiting list managed by the regional level, although waiting lists are managed directly local government called Wohnberatung Wien. There are by housing cooperatives and associations. also special programmes aimed at urgent cases of over- occupancy and the emancipation of people with disabilities In Quebec, housing cooperatives are responsible for who currently live in unsuitable flats. One such programme managing the selection of new members autonomously is the ‘smart’ housing programme. (Société d’Habitation du Québec 2003.) Since 1997, rental cooperatives (coopérative d’habitation locative) that receive Regulations on the possibility of inheriting a unit in a funding from the programme AccèsLogis must meet the housing cooperative are important to determine the extent general principle of favouring households with an income to which family relationships limit access to the cooperative ranging from 75% to 95% of the area average income. To model. In Quebec, cooperative rental contracts cannot access rental subsidies from the Quebec Housing Society legally be transferred to or be inherited by a person who (SHQ), applicants must have the SHQ certification that is not a member of the cooperative. Nevertheless, internal applies to all publicly-funded affordable and social housing. articles of the association may grant family members comparative who already reside in the cooperative the possibility of in a few, they are based on the ratio between income and analysis staying there once the member leaves. In Italy, the lease in housing expenses. In Quebec, for example, between 20% 26 shared ownership cooperatives may be inherited by close and 50% of cooperative residents are eligible to receive a family members, such as the member’s spouse and/or subsidy for the portion of their rent that exceeds 25% of their children. It can also be transferred to other members household income (Société d’Habitation du Québec). In of the family if they meet the conditions set forth in the Uruguay, there exists a subsidy for the payment of monthly cooperative’s articles of association. fees adapted to the cooperative housing sector. In this case, if monthly fees represent more than 25% of a household’s 2.2. Subsidies to maintain affordability income, members can request a subsidy to cover the difference. If the household’s total income complies with In many cases, the long-term affordability of cooperative the official definition of poverty or extreme poverty, this projects is guaranteed through public subsidies. More subsidy can be increased up to 14%, or 8% of household’s specifically, it is often ensured through a) subsidies for income (FUCVAM 2018). monthly expenses and b) subsidies for the rehabilitation of buildings. b) Subsidies for the rehabilitation of buildings Building maintenance and renovation represent a a) Subsidies for monthly expenses significant expense for older cooperatives. More In all the cases studied, except for New York, Italy and the specifically, structural and comprehensive rehabilitation private housing cooperatives (Andel) of Denmark, there may put the economic sustainability of some projects at exists public aid for members to pay for their monthly risk. Therefore, a long-term policy approach must consider expenses. Except for Switzerland, such aid is provided this as an essential aspect to keep projects going. by regional and/or central governments. These subsidies allow low-income households to join cooperatives and help In Denmark, a national fund for common housing (Almen) residents cope with the occasional financial difficulties they was created using the collective savings from a heavily may experience. In the words of the Uruguayan Federation subsidized sector.12 Associations may draw from this fund of Mutual-Aid Housing Cooperatives (FUCVAM), these to pay for renovation expenses. Until 2004, there were subsidies are essential to ensure the ‘right to remain’ in also municipal guarantees for loans aimed at rehabilitating housing cooperatives. property owned by private housing cooperatives (Andel).13 In New York, in turn, rehabilitation is promoted through Residents of housing cooperatives and associations can the refinancing of cooperatives. In Quebec there are usually access the general rental subsidies available in the different subsidy programmes for the rehabilitation of country. In most cases, these subsidies are based on income; buildings, some of which are general and cooperatives can apply for, and others which are specifically tailored comparative for the cooperative housing sector. At the municipal level, analysis for example, the City Council of Montreal has a subsidy 27 programme for occasional renovation and comprehensive rehabilitation aimed at any type of housing but with more favourable conditions for cooperative housing.

12 Landsbyggefonden (s.d.) www.lbf.dk/.

13 Almenboligloven Act, Chapter 11a. Private housing cooperatives with support (removed in 2004): §160e. 3. Maintenance of the model over comparative sum of monthly fees they have paid for the principal of the analysis time cooperative’s mortgage loan, that is, excluding interest. It 28 3.1. Regulations restricting housing equity and the does not include the portion of the monthly fee that covers commodification of dwellings the cooperative’s administration, maintenance and other Just as important as allocating public resources to the common expenses either. In the case of New York, resale development of cooperative housing is ensuring that this prices are only limited during the term required in exchange investment remains in the sector and preventing it from for receiving different public subsidies, which has led to the becoming privatized at a later date. The commodification subsequent deregulation thereof. of decommodified housing, whether it belongs to the state, a cooperative or third-sector entity, is an issue everywhere. b) Regulations on monthly quotas or rents The legal frameworks and public policy measures in all In models that do not include equity contributions cases studied include – to a greater or lesser extent – or include very small, symbolic ones, regulations are mechanisms to hinder profit-making and/or individual focused mainly on the cost of monthly fees and rent. In capitalization of cooperative property. Specifically, Denmark, in the case of common housing (Almen), and these include a) regulations on the price of shares in the for housing cooperatives in Zurich, for example, rent cooperative, b) regulations on monthly quotas or rents, prices are established in relation to the costs borne by c) restrictions on subleasing housing, d) restrictions on the cooperative. That is, rent prices must cover debt, turning housing into individual property and e) regulations administrative expenses and generate the savings required on the dissolution of cooperatives. to cover building maintenance, and may not fluctuate based on market price. Moreover, Zurich City Council has a a) Regulations on the price of shares in the cooperative representative on the governing board of each cooperative Cooperative housing models in which members have a share who supervises their annual accounts (Zurich City Council in the cooperative’s equity, the price thereof is very often 2016). regulated. These shares cannot be purchased or sold on the open market but, rather, are subjected to price restrictions In Quebec, rent prices for new cooperative developments and, in many cases, members’ shares are only updated by must fall within 75% to 95% of the area mean price. Over the consumer price index. In the case of private housing time, this price is adjusted –while still staying within these cooperatives (Andel) in Denmark, the price of each share limits– based only on the evolution of the cooperative’s must reflect either the initial purchase or construction cost expenses. or the property’s valuation as a rental building. In Uruguay, the share that gets exchanged is called the ‘social share’ In the Mitchell-Lama programme in New York, on the and includes the member’s initial down payment and the other hand, buildings erected before 1974 are legally subject to rent stabilization, while those built later can opt out of In other cases, the prohibitions are limited in time. In comparative the programme once their mortgage has been completely Germany, cooperatives are subject to regulations against analysis paid off. commodification as long as they receive public subsidies or 29 for a subsequent commitment period that usually runs from c) Restrictions on subleasing housing 30 to 40 years. In Austria, on the other hand, tenants gain To ensure that cooperative housing is the primary residence the right to purchase their homes as individual property of members and to hinder any intention to make a profit after 10 years of residence. Consequently, around one third through subleasing, some countries also impose regulations of the housing stock in the sector is later privatized. Many in this area. In Uruguay, for example, subleasing housing to housing cooperatives in favour of collective ownership are, third parties is prohibited by law and is adequate cause for thus, against this provision (Orner 2017). expulsion from the cooperative.14 In Denmark, on the other hand, it is possible to sublease up to half of the rooms in a Other regulations stipulate the decision-making process common housing unit (Almen) through a contract approved required to legalize the sale of cooperative property or by the association (BL 2015). These types of regulations to divide it into individual units. In Italy, sales require reinforce the status of user –as opposed to owner– of the approval of a simple majority of members, while members. in Switzerland a two-thirds majority is required. In Uruguay, legislation requires a special 75% majority of the d) Restrictions on turning housing into individual cooperative assembly to be in favour of changing tenure property regime.16 In Denmark, in the case of common housing Selling cooperative housing as individual property and the (Almen) residents may only exercise their right to purchase “horizontal division” (subdivision) of collective cooperative individual property with the approval of different agents. property is prohibited in many of the cases analyzed. In Currently, a two-thirds majority is required from the local Quebec, cooperative members do not contribute equity to estate assembly, as well as approval from the “parent” the cooperative, either initially or at any other moment, housing association. If the latter does not grant its approval, which makes it impossible to convert their right of use into the purchase may be authorized by municipal authorities, ownership rights. The Quebec Cooperative Act protects provided that the “parent” housing association cannot the social and community purpose of property belonging to prove that the operation will be financially detrimental to housing cooperatives that was built, purchased, rehabilitated or renovated using public aid, which includes practically all cooperatives. In Holland, cooperatives built on public land 14 Law 13.728, Article 151, Uruguay. granted with an indefinite lease are obliged to maintain the 15 General Provisions for perpetual ground lease 2016, Article 9, Amsterdam. same property use established in the leasehold.15 16 Law 19.181, Article 33, Uruguay. comparative it (Danish Ministry of Social Affairs 2011). The decision- are considered to be based on the principles of collective analysis making processes involving multiple agents and levels ownership and indivisible reserves; demutualization is, 30 make it difficult for any party to unilaterally appropriate a therefore, prohibited. common resource.

e) Regulations on the dissolution of cooperatives The rules governing the dissolution process for cooperatives are also important in determining the future of the model. Regulations on the allocation of assets in the event of dissolution and subsequent changes to housing tenure may place obstacles to the potential commodification or privatization of housing. In Quebec, in the event of dissolution, the balance of assets must be transferred to another housing cooperative, a federation of housing cooperatives, or the Quebec Council of Cooperation and Mutuality (group of confederations of cooperative federations in Quebec).17 In Denmark, the property of a private housing cooperative (Andel) can only be transferred to another cooperative or changed to a rental housing tenure. In Switzerland, on the other hand, the City Council or Canton has pre-emption rights and rights of first refusal should a cooperative dissolve.

In cases such as Uruguay, for example, regulations define the allocation of assets once a cooperative has been dissolved. Once debts have been paid off and ‘social shares’ have been returned to members, any remaining amount is transferred to the National Institute for Cooperativism 18 (INACOOP). In Italy, after dissolution, cooperative 17 Cooperatives Act, Article 221.2.10, Quebec.

reserves must be transferred to the solidarity fund for 18 Cooperative System Act, No. 18,407, Article 97, Uruguay.

promoting cooperatives (Coopfond) and cannot be 19 Law 59 of 31 January 1992 regulates the tax-free national solidarity fund COOPFOND distributed among individual members.19 Cooperatives (Cooperative Promotion Fund), organized by LegaCoop, Italy. Contributions of the study use. Moreover, the pressures to privatize and commodify comparative are a recurrent threat to the continuity of decommodified analysis There are two main contributions of this study. In the forms of housing and, therefore, require special attention. 31 first place, it presents an overview of relevant legal In this regard, the study has categorized policies based on mechanisms and public policies that might serve as a source the moment in which they intervene: production, access of inspiration for different public administrations. In the and management, and maintenance of the model over time. second place, it offers a framework for analysing public This categorization is not strictly chronological but rather policies aimed at promoting cooperativism as an affordable substantive, and meant to aid the interpretation of the wide and accessible housing alternative. array and diversity of legal mechanisms and policies that local, regional and central administrations can employ to As mentioned in the introduction, the analytical framework support housing cooperativism throughout its life cycle. proposed here is characterized by a specific conceptual and temporal delimitation of the object of study. Conceptually, it is based on a definition of housing cooperativism as collective and (to varying degrees) decommodified housing. The project has focused on cooperatives that meet two conditions: 1) residents are, at least nominally, collective owners of their homes and, 2) homes cannot be purchased or sold on the free market. This definition includes a wide array of cooperative housing models while excluding those that, in essence, reproduce housing models based on individual or public ownership. The study focused on the legal frameworks and public policies supporting cooperative housing’s affordability and decommodification, often through forms of public-cooperative mechanisms.

As for the temporal delimitation, the study adopts a long- term approach that considers all phases of the housing life cycle. The affordability, accessibility and decommodified nature of cooperatives do not depend exclusively on the production (construction) of the cooperative housing stock, but also on the regulations that govern access and comparative Six concluding lessons Promotion of new developments and rehabilitation of analysis existing buildings. Housing cooperativism can include 32 As we have outlined above, the relationship between new housing development and the rehabilitation of cooperative housing and public administration has a long existing buildings – whether inhabited or vacant. In many trajectory. Based on the issues reviewed, we believe there contexts, housing cooperatives are promoted to regenerate are six elements present in the case studies analysed that urban areas, counter deterioration and abandonment, and are worth highlighting, as they are fundamental to the generate participation, inclusion and resident empowerment promotion of cooperative housing. processes.

Participation at all levels of the administration Promotion of social cohesion and inclusion of to promote housing cooperativism. All levels of vulnerable groups. Cooperatives can host different public administration can participate in promoting the demographic profiles, including people with low incomes affordability and decommodified nature of housing or specific housing needs due to their origin, gender or cooperatives in different ways. National, regional and age. Administrations can support or further inclusivity by municipal administrations can implement public policies establishing conditions for receiving public aid or through and specific programmes based on their remits, often specific direct and indirect subsidies. complementing one another. Promotion of cooperatives’ autonomy and public Comprehensive policies to expand the sector. Housing benefit. The autonomy of cooperatives is an added value of cooperatives benefit from public policies and legal the model, except in relation to the potential appropriation frameworks that respond to their needs in a comprehensive of the housing’s equity. The right of members to make and coherent fashion. Cooperatives need land, financing collective decisions about their housing is fundamental; and legal recognition in order to develop. Without public however, governance mechanisms and legal frameworks are support in these key areas, the model is unlikely to advance. also needed to ensure the continuity of the model over time and prevent commodification and/or privatization. Support during different phases. Public bodies may be involved in different phases of housing cooperativism: production, management and access, and maintenance over time. In addition to providing support during the initial development, it is important to highlight the key role of policies that regulate or support the long-term affordability and financial viability of housing cooperatives. References comparative analysis Berlin Senat (s.d.) Wohnungsneubau: Genossenschaftsförderung: www.stadtentwicklung. Alternativas para la provisión de suelo en Uruguay: www.lincolninst.edu/sites/default/ 33 berlin.de/wohnen/wohnungsbau/de/genossenschaftsfoerderung/index.shtml. files/pubfiles/mendive-wp14cm2sp-full_0.pdf.

BL (2015) Almene boliger for alle: e-pages.dk/bl/83/. Ministeri d’Assumptes Socials de Dinamarca (2011) Forslag til Lov om ændring af lov om almene boliger m.v. Available at: www.retsinformation.dk/Forms/R0710.aspx?id=136592. Bowman, A. (2004) Interim spaces: reshaping London: the role of short life property, 1970 to 2000 (tesi), Bristol: Universitat de Bristol. Ministerio de Vivienda, Ordenamiento Territorial y Medio Ambiente (MVOTMA) (s.d.) Llamado anual a cooperativas sin terreno: www.mvotma.gub.uy/programas-permanentes- Ajuntament de Viena (s.d.) Wohnfonds: www.wohnfonds.wien.at/website/article/nav/99. por-postulacion/construir/cooperativas/llamado-anual-a-cooperativas-sin-terreno. Ajuntament de Zuric (2016) Reglement über das Rechnungswesen der von der Stadt Morales, R.C. (2018) «La ruta autodestructiva del cooperativismo de vivienda Zürich unterstützten Wohnbauträger (Rechnungsreglement) Stadtratsbeschluss vom 19. puertorriqueño: el problema de la pérdida de la identidad cooperativa mediante la November 2003 mit Änderungen bis 21. Dezember 2016 (1059): www.stadt-zuerich.ch/ transformación de valores de uso en valores de cambio», a Boletín de la Asociación portal/de/index/politik_u_recht/amtliche_sammlung/inhaltsverzeichnis/8/841/170/170- Internacional de Derecho Cooperativo, 52, 19-46. reglement-ueber-das-rechnungswesen-der-von-der-stadt-zuerich.html. Número especial (2018) sobre habitatge col·laboratiu de l’International Journal of Community-led Housing (s.d.) Setting up a support hub for community-led housing: Housing Policy 18/1. clhtoolkit.org/housing/setting-support-hub-community-led-housing. Número especial (2019) sobre habitatge col·laboratiu del Journal of the Built Environment Federación Uruguaya de Cooperativas de Vivienda por Ayuda Mutua (FUCVAM) (2017) 45/3. Nuevo programa para financiar cupos libres en viviendas cooperativas de usuarios: www. fucvam.org.uy/financiacion-para-cupos-libres/. Orner, M. (2017) Gemeinnützige Wohnungen – Sozialbindung aufrechterhalten, A&W Blog: awblog.at/gemeinnuetzige-wohnungen-sozialbindung-aufrechterhalten- Federación Uruguaya de Cooperativas de Vivienda por Ayuda Mutua (FUCVAM) (2018) eigentumsoption/. Subsidio a la cuota: www.fucvam.org.uy/wp-content/uploads/2018/05/Subsidio-a-la- cuota-2018-web.pdf. Platform31 (2018) De wooncoöperatie als verhuurder: www.cooplink.nl/mediawiki/ documents/2018-11%20De%20wooncooperatie%20als%20verhuurder%20-%20 Gemeente Amsterdam (s.d.) Centrumeiland Pilot Wooncoöperatie: www.amsterdam.nl/ Platform31.pdf. wonen-leefomgeving/zelfbouw/projecten/centrumeiland-pilot/. Scanlon, K. et al. (eds.) Social Housing in Europe, Oxford: John Wiley & Sons. Gelderland (2016) Besluit van Gedeputeerde Staten van de provincie Gelderland houdende regels voor ruimte Regels Ruimte voor Gelderland 2016: decentrale.regelgeving. SHQ (Société d’habitation du Québec) (2003) «Chapitre 4 Admissibilité de la clientèle», overheid.nl/cvdr/xhtmloutput/Historie/Gelderland/CVDR390394/CVDR390394_18. in Guide d’élaboration et de réalisation des projets AccèsLogis Québec: www.habitation. html. gouv.qc.ca/fileadmin/internet/documents/partenaires/acceslogis/guide_elab_chapitre_4. pdf. IBA Hamburg (2018) Chancen für Baugemein-Schaften: www.hamburg.de/ contentblob/11927244/1b9cc4640642e18beb85c1a1bd7aeefe/data/ankuendigung- SHQ (Société d’habitation du Québec) (s.d.) AccèsLogis Québec: Programme supplément wilhelmsburger-entwicklungsgebiete.pdf. au loyer: www.habitation.gouv.qc.ca/espacepartenaires/municipalites/acceslogis_quebec/ programmes/acceslogis_quebec/participation_financiere_de_base/programme_ IFB Hamburg (2019) Baugemeinschaften. Förderrichtlinie für Baugemeinschaften mit supplement_au_loyer_psl.html. genossenschaftlichem Eigentum: www.ifbhh.de/fileadmin/pdf/IFB_Download/IFB_ Foerderrichtlinien/FoeRi_Baugemeinschaften.pdf. Vidal, L. (2019) «Cooperative Islands in Capitalist Waters: Limited‐equity Housing Cooperatives, Urban Renewal and Gentrification», a International Journal of Urban and Lang, R. et al. (2018) «Collaborative Housing Research (1990–2017): A Systematic Review Regional Research, 43/1, 157-178. and Thematic Analysis of the Field», a Housing, Theory and Society, 1-30.

Larsen, H.G. et al. (2015) «Commodifying Danish Housing Commons», a Geografiska Annaler: Series B, Human Geography, 97/3, 263-274.

Mendive, C. (2013) Cartera de Inmuebles de Vivienda de Interés Social (CIVIS): comparative Relationship between the types of actions identified and the different places of study analysis Legend: M (municipal scope) SM (supra-municipal scope) 34 Policies

Access to land and buildings Sale of public land Lease of public land and property

Activation of new cooperative projects through the rehabilitation of existing housing stock

Transfer of existing public or social housing to the cooperative sector

Reserving land or housing in new urban developments

Pre-emption rights and rights of first refusal

Access to financing Public lines of credit Public guarantees

Direct subsidies Direct subsidies (subsidies for construction/rehabilitation) Cooperative housing production Indirect subsidies Indirect subsidies (tax exemptions)

Technical support Technical support (municipal technical teams, advisory offices, support to technical non-profit teams)

Regulation on access to the Reserve of housing units for social renting cooperative housing stock Norms over the functioning of waiting lists and the transfer of leases

Subsidies to maintain Subsidies for monthly expenses

Access and affordability

management Subsidies for the rehabilitation of buildings

Regulations restricting housing Regulations on the price of shares in the cooperative equity and the commodification of dwellings Regulations on monthly quotas or rents Restrictions on subleasing housing

Restrictions on turning housing into individual property

model over time Regulations on the dissolution of cooperatives Maintenance of the Relationship between the types of actions identified and the different places of study comparative Legend: M (municipal scope) SM (supra-municipal scope) analysis 35 Denmark NY UK Uruguay Germany Austria Quebec Italy NL SW M SM M SM M SM M SM M SM M SM M SM M SM M SM M SM

Sale of public land Lease of public land and property

Activation of new cooperative projects through the rehabilitation of existing housing stock

Transfer of existing public or social housing to the cooperative sector

Reserving land or housing in new urban developments

Pre-emption rights and rights of first refusal

Public lines of credit Public guarantees comparative analysis 36 comparative analysis case 37 studies

Germany The Netherlands Corinna Hölzl and Tobias Bernet Carles Baiges Austria Quebec (Canada) Ernst Gruber Max Gigling Denmark United Kingdom Lorenzo Vidal Mara Ferreri Lazio (Italy) Switzerland Luisa Rossini Claudia Thiesen New York (USA) Uruguay Eduard Cabré Lorenzo Vidal case studies

38

A project of the Mietshäuser Syndikat Source: Sandra Wildemann Germany case studies Corinna Hölzl and Tobias Bernet 39 The research of the German case study has been done in collaboration with Helga Ring

Introduction and context There are around 2,000 housing cooperatives in Germany Cooperative housing has a comparatively long history in today, which own a total of 2.2 million homes. This amounts Germany. The first cooperatives were founded in the late 19th to approximately 10% of all rental units (Crome 2007). century, largely as philanthropic initiatives by upper-class Their share of the housing stock tends to be higher in social reformers. It was only after World War I that many eastern German cities, with 27% in Rostock and 17% in of them were turned into true selfhelp organizations, with Leipzig, for example. Hamburg has the most cooperative working-class members taking over board positions. The housing among major western German cities, at 14%; in Weimar era also saw the founding of many new cooperatives. (reunified) Berlin, it makes up 10% (Montanari et al. 2014). During the Nazi regime, there was forced centralization of the cooperative sector that wasn’t reversed in either the While the legal form of the cooperative remains regulated GDR, where housing cooperatives became part of the state- by a federal law (Genossenschaftsgesetz) that provides controlled command economy, or the FRG, where they were for a basic democratic structure – one vote per member, integrated into a non-profit housing sector dominated by regardless of the number of shares held –, increasingly large noncooperative corporations. The bankruptcy in the bureaucratic and hierarchical structures within large 1980s of the most prominent of these, the union-controlled housing cooperatives have often been criticized. Since Neue Heimat group, was used as a major argument for around 1980, a new generation of cooperatives – emerging abolishing the special non-profit housing provider status from the legalization of squats and other social movements (Wohnungsgemeinnützigkeit) altogether as of 1990. – has attempted to implement more participatory models. This cooperative renaissance encompasses organizations Unlike other enterprises formerly governed by this that are, for various reasons, based on legal forms other instrument, housing cooperatives have maintained a mostly than the registered cooperative. The most significant case non-profit approach, offering rents/fees well below average, is the Mietshäuser Syndikat, an apartment-house syndicate especially in major cities. with a network of more than 140 self-managed housing case studies projects from all over Germany. Its specific structure Cooperative housing production prevents the recommodification of real estate. The property 40 of each project is owned by a limited liability company with Access to land and buildings two shareholders: a resident association and the Syndikat Many municipalities sell and/or lease public land to as a whole, giving the network veto power against attempts cooperatives. The degree to which they get preferential made by any project to resell a house (Rost 2014, Balmer et access varies. One important instrument to legitimize al. 2015).1 favouring cooperatives (and co-housing initiatives in other legal forms) are Konzeptverfahren (also Konzeptvergaben), The contemporary landscape of cooperative housing that is, tender procedures which take social, ecological in Germany is thus characterized by a wide variety of and intergenerational criteria into account instead of organizational principles, accessibility (depending on allotting land to the highest bidders. Both Tübingen and economic and or sociocultural capital), motivation of Hamburg, for example, divide up public land into small lots dwellers (secure tenure, low rents, and/or a communal in some areas to enable small-scale co-housing projects. lifestyle) etc., with general tension between larger, Hamburg also has a fixed quota of 20% of land reserved for ‘traditional’ and small to mid-size ‘young’ cooperatives. co-housing projects in new developments on public land While the latter are still a rather marginal phenomenon (Ache et al. 2012: 407).2 regarding their share of the total housing stock, they are ascribed a high degree of societal relevance because of their Giving cooperatives access to land via leasehold focus on co-housing models and self-organization (Ache et (Erbbaurecht) instead of sale would be more in line with a al. 2012, Kegel 2015). long-term sustainable municipal land policy, but it is not very common as of yet (and is often met with disapproval There is a limited tax exemption for some housing by cooperatives). Leipzig has recently combined allocation cooperatives on the federal level, yet no construction subsidy via a Konzeptvergabe procedure with leasehold contracts. that favours specific legal forms at the moment. (Yet both Periods of leasehold contracts vary between 30 and 99 the Left [Die Linke] and the Green [Die Grünen] parties years. are in favour of reintroducing a specific non-profit housing provider status (Holm et al. 2017, Kuhnert et al. 2017). There To regulate the use of land in private ownership – including is a variety of policies on the local and regional (Länder) level housing construction –, municipalities can tie the that promote cooperative housing, often in the form of access 1 There are attempts at creating spin-offs of the Syndikat in other European countries; see to both municipally and privately owned land via leasehold www.syndikat.org/en/international-projects/. contracts and quotas in newly developed and rezoned areas, 2 See verein.fgw-ev.de/files/forum_konzeptverfahren.pdf [in German] for an evaluation of respectively (see table for more policy details). procedures in Tübingen, Hamburg, Munich, and Berlin. decision to rezone land to landowners’ willingness to both projects as well as to other corporations willing to submit to case studies contribute to infrastructure cost and relinquish a certain the respective regulations. share of the housing built (usually 30%) to subsidized and/ 41 or non-profit providers, of which cooperatives often form Specific financial support for cooperatives is available, for part. This instrument is called Soziale Bodenordnung in example in Berlin and Hamburg via interest-free or low- Munich and Kooperative Baulandentwicklung in Berlin. interest loans for construction, as well as the purchase of existing buildings.4 Access to financing is particularly Under certain circumstances – specifically in areas relevant for younger cooperatives with no or low equity. designated for the protection of the composition of the population (Soziale Erhaltungssatzung, also Milieuschutz) Besides public credit lines and allocation of public land – municipalities have a right of first refusal, which they through hereditary leaseholds, tenant initiatives can usually exercise in favour of municipal housing associations. also draw on the support of land foundations, which, This could be expanded to cooperatives and co-housing for instance, purchase the land and provide it to tenant projects; in Berlin, one Mietshäuser Syndikat project was communities in the form of leaseholds. Examples include founded by the tenants of a house that was acquired via the Edith Maryon Foundation or Trias Foundation. 5 the municipality’s right of first refusal.3 As the beneficiary usually has to pay the price offered by the original buyer, Direct subsidies it is difficult to keep rents at a reasonable level in many Most direct construction subsidies (including subsidized potential cases of purchase via right of first refusal. The city loans) are available to all housing providers willing to of Berlin has therefore begun to directly subsidize these submit to the programmes’ regulations (see above). They purchases. are mostly implemented at the state (Land) level, with the federal government paying for part of them. The Access to financing aforementioned programs in Berlin and Hamburg have Loans at low interest rates (0.75%) for the acquisition of constructions subsidies. Note that many of the instruments cooperative shares for individuals/households are available mentioned here that are used by these two cities are at through the federal development bank (KfW) (up to least partly due to the fact that they are two of only three €50.000 per project).

The German system of supply-side housing promotion 3 generally does not distinguish between providers of See www.syndikat.org/de/projekte/z48-kreuzberg-e-v/. 4 See www.stadtentwicklung.berlin.de/wohnen/wohnungsbau/de/ different legal forms. In other words, most guarantees and genossenschaftsfoerderung/index.shtml and www.ifbhh.de/fileadmin/pdf/IFB_Download/ subsidies are available to cooperatives and co-housing IFB_Foerderrichtlinien/FoeRi_Baugemeinschaften.pdf. case studies German city-states, or rather, municipalities who also hold (which are, as mentioned, usually disbursed by state the powers of a Land. governments) are conditional on municipalities’ right to 42 allocate the subsidized housing to low-income tenants, Indirect subsidies as defined by the federal Housing Promotion Law Housing cooperatives that generate at least 90% of their (Wohnraumförderungsgesetz). This applies regardless of revenue through rents paid by members are exempt from whether the owner of the subsidized homes in question is a the federal corporate tax (Körperschaftssteuer). cooperative or another type of provider.

Technical support With regard to their non-subsidized units, cooperatives Technical support for communal and especially are free to set their own rules of access. Long-standing intergenerational housing projects is available in many members often get preference, yet in high-demand areas, municipalities; indeed, ‘most of the activities carried some cooperatives have stopped using conventional waiting out by municipalities fall under the broad term of lists and incorporate criteria to take into account the needs communication and information’ (Ache/Fedrowitz 2012: of groups that experience discrimination in the housing 408). The extent of this kind of support varies according market etc. to the importance placed on the topic by the municipality and its financial means. Well-established examples Subsidies to maintain affordability include Hamburg’s Agentur für Baugemeinschaften There are two major demand-side subsidies regulated and Munich’s Mitbauzentrale6. In Berlin, there is the at the federal level (but, in effect, largely paid out of Netzwerkagentur GenerationenWohnen and in Leipzig, the municipal budgets), that is, direct payments towards recently established agency Netzwerk Leipziger Freiheit,7 the housing cost of low-income households: the housing which, like support teams in other cities, has grown out allowance (Wohngeld) and cost of lodging (Kosten of the co-housing scene’s own efforts to institutionalize der Unterkunft), the latter of which is tied to general knowledge transfer.8 This is also true for the establishment welfare/unemployment support. Tenants are eligible for of cohousing project days (Wohnprojekttage) in various cities, where initiatives can network to find members, get in touch with financing and construction experts, etc. 5 See maryon.ch/en/ and www.stiftung-trias.de/english/. 6 See www.hamburg.de/baugemeinschaften/ and www.mitbauzentrale-muenchen.de/ home.html. Access and management 7 See www.stadtentwicklung.berlin.de/wohnen/wohnungsbau/de/strategie/ baugemeinschaften.shtml and www.netzwerk-leipziger-freiheit.de.

Regulations on access to the cooperative housing stock 8 In this regard, the Wohnbund network has been an important facilitator on the federal Supply-side subsidies for housing construction level since the 1980s. See www.wohnbund.de. References this regardless of the type of provider (cooperative or case studies Ache, P. et al. (2012) «The Development of Co-Housing Initiatives in Germany», in Built otherwise) they pay rent to. Environment 38/3, 395-412. 43 Balmer, I. et al. (2015) «Housing as a Common Resource? Decommodification and Self- Most of the demand-side/construction subsidy programs Organization in Housing – Examples from Germany and Switzerland», in Dellenbaugh, mentioned above can be accessed not only for new M. et al. (eds.) Urban Commons: Moving Beyond Market and State, Berlín – Basilea: Birkhäuser, 178-195. construction but also for renovations and refurbishment. Crome, B. (2007) «Entwicklung und Situation der Wohnungsgenossenschaften in Deutschland», in Informationen zur Raumentwicklung 4, 211-221.

Maintenance of the model over time Holm, A. et al. (2017) Neue Wohnungsgemeinnützigkeit: Voraussetzungen, Modelle und erwartete Effekte, Berlín: Rosa-Luxemburg-Stiftung. Regulations on housing equity and the commodification Kegel, M. (2015) «Die Wohnungsgenossenschaften in Deutschland», in RaumPlanung 179/3, 47-49. of dwellings Kuhnert, J. et al. (2017) Neue Wohnungsgemeinnützigkeit: Wege zu langfristig preiswertem The federal Cooperative Law (Genossenschaftsgesetz) und zukunftsgerechtem Wohnraum, Wiesbaden: Springer. defines cooperatives in all sectors of the economy Montanari, G. et al. (2014) «Kommunale und genossenschaftliche Wohnungsbestände in as enterprises with the purpose of benefitting their Deutschland», in Nationalatlas aktuell 8/3. members, which prescribes a general collective self-help Rost, S. (2014) «Das Mietshäuser Syndikat», a Helfrich, S. (ed.) Commons: Für eine neue approach. It, thus, places rather strong barriers against Politik jenseits von Markt und Staat, Bielefeld: Heinrich-Böll-Stiftung, 285-287. dissolving cooperative property and the commodification/ privatization of cooperative housing yet does not wholly prevent it.

When construction by cooperatives is subsidized, the provision of cooperative housing may be tied to specific conditions, such as income limits of tenants and rent control for a defined period of time.9

9 For Munich, see BayWoFG Chap. 14; www.muenchen.de/rathaus/dam/jcr:78af6e32-f8ab- 41a0-9827-8baa0e5bb48e/2019%20MM-Genossenschaften_Infoblatt.pdf. case studies

44

Miss Sargfabrik (Vienna, Austria). Source: Haeferl (Wikimedia Commons) Austria case studies Ernst Gruber 45

Introduction and context cooperatives, these associations lost touch with their The Austrian housing market is based heavily on rentals, members in the ‘cooperative sense’ long ago. Yet even with an exceptionally low rate of just 55% owner-occupied when managed like ordinary housing companies, under households. Spain, in comparison, has a rate of 78%. The the framework of the limited-profit housing sector they key actor in the production of affordable, rent-based are a pillar of affordable Austrian housing production. This housing in Austria since the post-war area is the limited- is largely due to rent caps, which result in an average rent profit housing sector, with its housing companies and of about €7.70 per m² for tenants in flats constructed since associations. The term ‘limited-profit’ covers different 2011 – about €4 per m² less than the rent demanded by meanings: the German term gemeinnützig can be translated for-profit developers (GBV 2019e). Additionally, tenancy directly as ‘serving the public good’ and, thus, emphasises agreements in flats by limited-profit housing associations its role for the tenants and society in this regard. In the are unlimited and can even be passed on within families. relevant literature, the widely used English phrase ‘limited- Limited-profit housing associations benefit from lower profit’ refers to the legally limited returns (of about 2%) of turnover taxes (10% instead of 20%) and are exempt from such associations (GBV 2019c). the unlimited corporate tax (25%).

The whole limited-profit Austrian housing sector comprises The majority of flats constructed this way have been 90 capital societies and about 100 housing cooperatives financed with the support of public funds, hence the (GBV 2019a), which have completed between 15,000 and term gemeinnützig. In total, the associations in this sector 18,000 flats every year over the last decade and continues at manage or own about 40% of all rented flats in Austria, a similar level (GBV 2019d). which makes up 20% of the total Austrian housing stock. The sheer quantity, together with the high pressure of Although still often nominally owned by their members private capital currently flowing into the housing market collectively (Gruber et al. 2018), who pay user fees for investment opportunities, makes limited-profit housing (as opposed to rents), and colloquially referred to as associations a target for speculation. Recent examples have case studies shown that even under the strict framework of the limited- and service centres of the municipality of Vienna’. The profit housing sector, there is a potential threat against its wohnfonds_Wien is responsible for buying public and 46 most important benefit to society: securing the longterm private land. It negotiates with land-owners to secure affordability of flats. adjacent plots of land in strategic areas (Wohnfonds Wien 2019). It is responsible for conceptual competitions for Cooperative housing production the construction of new social housing stock, thus selling plots at fixed land-prices of about €230 per gross buildable Access to land and buildings square metre, which is generally far below market price. Access to land is regulated by the Austrian provinces on The wohnfonds_Wien still has considerable reserves, but an individual basis. Of the nine Austrian provinces, four only releases them to the competition bit by bit (Förster have set up funds for access to and distribution of land for et al. 2016). Although a minority, some of these plots are building affordable housing: Carinthia, Tyrol, Salzburg distributed as building leases rather than being sold. and Vienna. These funds are not only responsible for assigning plots for social and affordable housing in general In Tyrol, a new law was passed allowing for zoning to but also serve a strategic purpose in the densification of designate areas as building land reserved for subsidised town centres (Zeinler 2012). The funds are able to finance housing. In the near future, Tyrolean communes will be themselves autonomously by acquiring, upzoning and obliged to act similarly (TIROL 2019a). subsequently selling building land at a higher price (Amann 2011). In some provinces, such as Carinthia and Tyrol, In Lower Austria, affordable housing can be supported these funds also allocate loans to local authorities to set by leasing plots in favour of selling land or through pre- infrastructural measurements or buy land. emption of land by municipalities, which then pass it on to limited-profit housing developers at a lower rate. In most Austrian provinces, there are maximum building budgets which non-equity housing cooperatives and Access to financing developers must stay within to be eligible for subsidies. Following the Austrian federal approach, public funding is This used to be the case in Vienna, too. However, this was the responsibility of the nine Austrian federal provinces. recently abandoned in favour of maximum rent caps. Annually, there are approximately €3 billion available for all Austrian provinces. The majority of these funds come In Vienna, the fund for housing construction and urban from the federal budget, distributed through financial renewal (wohnfonds_Wien) acts as a limitedprofit equalization. As of 2008, there has been no ‘appropriation’ organization owned by the municipality. It ‘coordinates of these funds (Zweckbindung), meaning that the provinces property developers, house owners, municipal departments do not have to allocate them all to housing (Zoidl 2015). Besides subsidies for new construction and refurbishments considered to be far more effective in this regard is due case studies (see Direct subsidies), loans from socalled housing banks to its large number of subsidies for new construction play an important role in the funding of limited-profit (62%) and refurbishments (24%) rather than subsidies to 47 housing. The banks involved can be both private and individuals (14%). This also gives the provinces leverage cooperative banks. Such loans co-finance about 70% of through regulations (OeNB 2019). largevolume housing stocks, of which over 66% are limited- profit housing projects. The housing bank system is rooted As in most Austrian provinces, the construction of flats in in a national law passed in 1993 to encourage housing in multi-storey houses in Lower Austria is promoted through general. The banks involved issue tax-privileged housing subsidised loans to fund construction (direct subsidies or bonds for refinancing. In accordance with the appropriation loans). Such loans must be repaid within 31 years by the of these funds, they are related directly to subsidized rental housing associations (BF 2019). housing. However, bonds by housing banks are recurrent, with just four banks involved in 2018 issuing bonds of The province of Tyrol is promoting the ‘5-Euro-Housing’ approximately €285 million (GBV 2019b). model. The term ‘5 Euros’ refers to the rent per square metre and includes operating and heating costs, and taxes. The housing bank that administers the loans for Lower The model is aimed at apartment buildings with 15 to 25 Austria takes out loans from the European Investment rental flats and has been implemented in six regions so far, Bank to gain very low interest rates, which contribute to with three more planned to follow. It is financed through a financing the housing activities of limited-profit housing mix of a high percentage of own capital from the limited- associations (ORF 2019). profit housing developers, bank loans and a contribution through housing loans. Additionally, the commune Direct subsidies contributes by making cheap land available. A total of 85% Due to Austria’s federal approach, the responsibility for of the flats built under this model are allocated through the public subsidies and funding falls within the competence local commune, while the remaining 15% go through the of the nine Austrian federal provinces. Some of them province of Tyrol. Individual income limits are 33% lower tie the allocation of public funding for rented housing than for ordinary subsidised flats (TIROL 2019b). blocks to limited-profit housing associations; others, most prominently Vienna, do not. Compared to other countries, In Vienna, subsidies are generally allocated in the form of public funding for housing in Austria is relatively low, municipal loans between €510 and €700 per m² of floor amounting to less than 1% of the GDP (comparable to space. With a yearly interest rate of 1%, this loan contributes Spain) or about €2.5 billion per year. Even US spending to lower financing expenses. The allocation is open to all on housing is greater. The reason why Austria is still developers, not just limited-profit housing developers. case studies However, the majority of developers taking part in calls for Technical support tenders for subsidised housing are indeed limited-profit Support from the authorities for those receiving loans 48 housing developers, perhaps in part due to the complexity focuses on the administration of loans, such as assistance of such calls. during the application process. For larger developing areas, there is support for aspects of mobility or the design of Since its 2011 call for tenders, the City of Vienna sells open spaces. In Vienna, interdisciplinary teams funded some municipal building plots under a specific scheme and appointed by the municipality Gebietsbetreuungen called Wohnbauinitiative (Municipality of Vienna 2019a). sometimes act as local coordinators, taking care of tenants’ The municipality provides bullet loans of €800 per m² of and future tenants’ needs. They sometimes assist in cross- usable floor space with an interest of 3.9% for 10 years on linking participating design teams in the process, as well. a fixed-term basis. These loans would be second rank in bank collateralization, making additional commercial loans Access and management cheaper (Mundt et al. 2018). Regulations on access to the cooperative housing stock Indirect subsidies In order to be eligible for subsidised housing, maximum The Austrian limited-profit housing sector must income levels must not be exceeded. These income levels comply with the Austrian Limited-Profit Housing Law are set independently by the provinces. In Vienna, for (Wohnungsgemeinnützigkeitsgesetz). This stipulates that example, they are relatively high, so that about 80% of rents must be ‘appropriate’, meaning they must not be lower the population meets them. In combination with high or higher than necessary in order to cover all expenses quality standards, this ensures the social mix desired including (legally limited) returns (about 2%) (GBV 2019c). by the municipality. In order to place a greater focus on After all loans for a house have been repaid, rents usually underprivileged groups, the so-called Smart housing drop to the rental price of €3/m², including maintenance program has been initiated and is aimed at lower incomes. payments. By law, returns must be re-invested in the The waiting lists are structured in order of arrival. In urgent acquisition of new land, as well as in refurbishment and cases or situations of ‘justified housing requirements’, new developments. This contributes to a higher amount of people may be eligible for flats with less demand for own equity capital, thus lowering financing expenses. Tenancy capital, such as Smart-flats of municipal flats that require agreements in flats by limited-profit housing associations no own capital at all. In Vienna there are three justified must be unlimited (WGG 2019). In return, limited-profit requirements: overcrowding (for example, a flat with housing associations have a lower turnover tax (10% instead one bedroom would be regarded as overcrowded when of 20%) and are exempt from the unlimited corporate tax inhabited by two or more people), first-time establishment (25%) (Rechnungshof 2015). of a household (for people under 30) and people with special needs (for disabled people currently living in a flat to buy as individual property. Rent paid up to that point is case studies which is not obstacle-free) (WSW 2019). However, these not taken into consideration for the buying price. Although lists are administered individually and not transparently there are no official numbers, it can be estimated that 49 by each cooperative or housing association. This also 33% of subsidised rented flats are currently transferred to means people interested in subsidised flats have to register individual property from flats in housing cooperatives due for each cooperative separately. Additionally, there are to relatively low interest rates. Flats built by non-profit municipal waiting lists, for example, in Vienna through organizations fall under non-profit law (RIS 2019a), unless the Wohnberatung Wien. One-third of all flats constructed they are bought by their own tenants (Orner 2019). with housing subsidies are allocated by the municipality in return for housing subsidies. Since non-profit housing associations and cooperatives must meet strict economic criteria regarding their rents and Maintenance of the model over time capital, the intention is to keep flats built through subsidies non-profit for as long as possible (RIS 2019b). This is one Subsidies to maintain affordability of the reasons why housing associations or cooperatives There is also the possibility of obtaining individual legally cannot take back the title ‘limited-profit’ freely or subsidies for rented flats through a housing benefit as a dissolve themselves at their wish. This should prevent monthly, non-refundable loan that does not have to be speculation with this housing stock. However, there are repaid (AGA 2019). Tenants of subsidized and free-market certain circumstances that can lead to removal of the title flats are eligible. ‘limited-profit’. As it has been proven possible to provoke the dissolution of a limited-profit housing association, it has In Vienna, there are replacement loans for the capital become evident that there are loopholes in this structure, resources needed to enter a subsidized rental flat, i.e. when the statute of the association or cooperative fails depending on household income and family situation. to meet certain legal requirements (WGG 2019). Failure of Capital resources between €60 to €500 per square meter this kind may be enforced, which has been the case at least must be paid to the cooperative or housing association twice in recent years. when entering the contract (Municipality of Vienna 2019b). One prominent example showed how the privatization Regulations on housing equity and the commodification of the federal tobacco company consequently led to its of dwellings housing cooperatives, – intended to cover its employees’ Tenants of subsidised flats exceeding a certain amount of housing needs – being transferred into private ownership individual capital resources have the right to buy after 10 and sold several times for multiple profits (Anzenberger years. This means that flats must be offered to the residents 2018, Ellensohn 2019). Flats sold in such a manner remain case studies affordable, but the new owner can make a profit by selling empty flats. Another weakness of the system intended to 50 prevent the loss of public money spent on housing subsidies when a limited-profit association loses its title is the evaluation of the association’s housing stock value, which is to be repaid when the ‘limited-profit’ title is lost. It has been seen that the association’s balance sheets, which form the basis for this evaluation, can be creatively designed to reduce the value to a minimum. One example resulted in 1,000 flats being ‘sold’ this way for €17 million – slightly less than 10% of their real market value (Matzinger 2019). References oenb.at/dam/jcr:1a3001d8-1b6d-4be2-b3e8-fed51e89bbb8/factsheet_wohnimmobilien- case studies AGA (Austrian Government Agency) (2019): www.oesterreich.gv.at/themen/bauen_ strukturdaten.pdf. wohnen_und_umwelt/wohnen/8/3/Seite.210172.html. ORF (Austrian Broadcasting Corporation) (2019) «24.000 geförderte Mietwohnungen Amann, W. (2011) Minderung des Grundflächenverbrauchs im Wohnbau. Study for the fehlen»: orf.at/stories/3119259. 51 Housing Research Department of Lower Austria (Wohnbauforschung Niederösterreich). Orner, M. (2019) «Gemeinnützige Wohnungen – Sozialbindung aufrechterhalten», in Anzenberger, A. (2018) «Wie die Abzocke mit gemeinnützigen Bauträgern funktionier. A&W Blog: awblog.at/gemeinnuetzige-wohnungen-sozialbindung-aufrechterhalten- Kurier»: kurier.at/wirtschaft/wie-die-abzocke-mit-gemeinnuetzigen-bautraegern- eigentumsoption/. funktioniert/400138985. Rechnungshof (2015) «Gemeinnützigkeit im Steuerrecht», Viena, 266: www. BF (Austrian Ministry of Finance) (2019): transparenzportal.gv.at/tdb/tp/ rechnungshof.gv.at/rh/home/home/Gemeinnuetzigkeit_Steuerrecht.pdf. leistung/1014810.html. RIS (Legal Information System of the Republic of Austria) (2019a): www.ris.bka.gv.at/ Ellensohn, D. (2019) «Der Kriminallfall GESFÖ/Riedenhof»: wien.gruene.at/wohnen/ Dokument.wxe?Abfrage=Justiz&Dokumentnummer=JJT_19990309_OGH0002_0050OB kriminalfall1. 00040_99I0000_000.

Förster, W. et al. (eds.) (2016) The Vienna Model. Housing for the Twenty-First-Century RIS (Legal Information System of the Republic of Austria) (2019b): www.ris.bka.gv.at/ City, Berlín: Jovis. GeltendeFassung.wxe?Abfrage=Bundesnormen&Gesetzesnummer=10012053.

GBV (Austrian Federation of Limited-Profit Housing Associations) (2019c): www.gbv.at/ TIROL (Region of the Tyrol) (2019a): www.tirol.gv.at/fileadmin/downloads/0_Startseite/ Page/View/4566. RegKlausur_9012019_Factsheet_1_Zeitplan.pdf.

GBV (Austrian Federation of Limited-Profit Housing Associations) (2019a): www.gbv.at/ TIROL (Region of the Tyrol) (2019b): www.tirol.gv.at/bauen-wohnen/ Page/View/4103. wohnbaufoerderung/neubau/besonderer-mietwohnbau-5-euro-wohnen.

GBV (Austrian Federation of Limited-Profit Housing Associations) (2019b): www.gbv.at/ WGG (Limited-Profit Housing Act) (2019) «Art. 1 § 35»: www.jusline.at/gesetz/wgg/ Page/View/4549. paragraf/artikel1zu36.

GBV (Austrian Federation of Limited-Profit Housing Associations) (2019c): www.gbv.at/ WGG (Limited-Profit Housing Act) (2019) «Art. 1 § 35»: www.jusline.at/gesetz/wgg/ Page/View/4566. paragraf/artikel1zu36.

GBV (Austrian Federation of Limited-Profit Housing Associations) (2019d): www.gbv.at/ Wohnfonds Wien (Viennese Fund for Housing Construction and Urban Renewal) (2019): Page/View/4693. www.wohnfonds.wien.at/website/article/nav/103.

GBV (Austrian Federation of Limited-Profit Housing Associations) (2019e): www. WSW (Viennese Housing Service) (2019): wohnservice-wien.at/service/faqs. gbv-aktuell.at/news/62-gbv-mieten-10-quadratmeter-mehr-wohnflaeche-fuer-130-euro- Zeinler, K. (2012) Nachhaltige Siedlungsentwicklung im ländlichen Raum (PhD), Viena: weniger-miete. Universitat de Viena. Faculty for Earth Sciences, Geography and Astronomy. Gruber et al. (2018) «Collaborative housing models in Vienna through the lens of social Zoidl, F. (2015) «Warnungen vor, Forderungen nach Zweckbindung. Der Standard»: innovation», in Van Bortel, G. et al. (eds.) Affordable Housing Governance and Finance, www.derstandard.at/story/2000019771216/warnungen-vor-und-forderungen-nach- Londres: Routledge, 41-58. zweckbindung-der-wohnbaufoerderung. Matzinger, L. (2019) «Wenn Strohmänner zu singen beginnen. Falter 29/19». [imprès].

Mundt, A. et al. (2018) «‘Wiener Wohnbauinitiative’. A new financing vehicle for affordable housing in Vienna, Austria», in Van Bortel, G. et al. (eds.) Affordable Housing Governance and Finance, Londres: Routledge.

Ajuntament de Viena (2019a): www.wien.gv.at/bauen-wohnen/wohnbauinitiative.html.

Ajuntament de Viena (2019b): www.wien.gv.at/wohnen/wohnbaufoerderung/ landesdarlehen.

OeNB (Austrian National Bank) (2019) «Strukturelle Daten zum Immobilienmarkt»: www. case studies

52

Bakkegaarden (Aarhus, Denmark). Source: RhinoMind (Wikimedia Commons) Denmark case studies Lorenzo Vidal 53

Introduction and context the other hand, did not ake off until the late 1970s, following In Denmark, housing cooperativism has given rise to a legislative change that granted tenants pre-emption two different housing sectors. On the one hand, there are rights for their homes if they formed a cooperative. Both some 10,000 private housing cooperatives (Andel), which sectors are governed in accordance with their respective represent 8% of the country’s housing stock. In this sector, legislation: Almenboligloven and Andelsboligloven. Over the members own a share in the cooperative’s collective course of history, the common housing sector has received property, the value of which is regulated by law. On the direct subsidies for different amounts to purchase land and other hand, there is the common housing sector (Almen), build, as well as individual subsidies to pay rent. In return, which is formed by a federation of 550 housing associations, access to the sector is organized through waiting lists open representing 20% of the national housing stock. In this to all citizens, and 25% of the homes built are reserved for model, residents have an open-ended lease agreement and social housing applicants. Private housing cooperatives, in participate in their association’s management through a comparison, have mainly received public grants of a less system of “tenant democracy”. While the common housing direct nature, such as tax exemptions and local guarantees sector has very close ties with public administrations, for access to financing. At the same time, each cooperative private housing cooperatives operate with a high degree of decides on the mechanism for transferring shares in its autonomy. collective property autonomously.

Housing cooperativism first arrived in Denmark in the Over time, these sectors have taken on increasingly late 19th century in the form of working class self-help different roles in Denmark’s housing system. Following initiatives, generating a specific institutional framework the privatization processes that undermined state-owned over time. The basic characteristics of the common housing housing during the 1990s, common housing is now the sector were defined in the 1930s based on national and local central pillar of public housing in the country. Both the regulations and financing. Private housing cooperatives, on relative autonomy of this sector from the State, as well as its case studies federated institutional form with multiple scales and actors with financing entities (with a municipal guarantee). have been essential in enduring the central government’s 54 attempts at privatization during the 2000s. Common Municipalities may provide guarantees for mortgage loans housing continues to be a non-commercial sector, while for private housing cooperatives (Andel), both for existing also serving the function of social housing and providing buildings and new developments..3 shelter for low-income citizens. The decentralized and fragmented self-government structures of private housing Direct subsidies cooperatives, however, did fall prey to the liberalization In addition to the 14% of initial capital, common housing reforms. This has led to significant increases in its housing (Almen) also receives public assistance in covering part of prices and the sector is, thus, an option only for the middle the loan amortization payment. The amount tenants pay in class. Even so, these cooperatives maintain collective rent is calculated on a yearly basis to represent 3.4% of the ownership of their property and still represent a more initial cost and is adjusted for up to 75% of the inflation affordable option than purchasing individual property. rate (or the salary inflation rate, whichever is lower). Rent is used to pay off the property mortgage. The difference Cooperative housing production between the loan amortization payments and the total Access to land and buildings amount received from rent is covered by transfers from In addition to selling public land to common housing the central government (Gibb 2013). associations (Almen), municipalities may require that new, private housing developments reserve 25% of the land for Until 2004, private housing cooperatives (Andel) could common housing.1 also receive public subsidies for up to 10% of the initial cost of the project, without exceeding 600 Danish krones As previously mentioned, tenants in vertical property per square metre.4 buildings have pre-emption rights for their homes if they set up a private cooperative (Andel). To make purchases on this basis, at least 60% of tenants in the building must join 1 Notice on plan implementation (Bekendtgørelse af lov om planlægning), §15, Stk. 2. www.retsinformation.dk/Forms/R0710.aspx?id=200614#idd991105b-a3f6-49ec-9e62- 2 the cooperative. 345bca32f2e0

2 Cooperatives Act (Andelsboligloven). Chapter 2. Housing cooperative associations. www. Access to financing retsinformation.dk/Forms/R0710.aspx?id=203465 As regards financing for new common housing (Almen) 3 Cooperatives Act (Andelsboligloven). Chapter 11b. Private housing cooperative without support. www.retsinformation.dk/Forms/R0710.aspx?id=206725#idea75171f-da74-4624- developments, 14% of the initial capital is provided by 9751-0aa3e236a891

the municipality from its annual budget, 2% by the initial 4 Cooperatives Act (Andelsboligloven). Chapter 11a. Private housing cooperatives with deposits from tenants, and 84% by mortgages contracted support. (www.retsinformation.dk/Forms/R0710.aspx?id=26144, removed in 2004) Indirect subsidies especially, through the rent of residential complexes that case studies Common housing (Almen) and cooperative housing (Andel) have already paid off their mortgages. The fund is designed are exempt from real estate tax. to finance the maintenance and improvement of existing 55 residential complexes. Access and management Until 2004, housing cooperatives (Andel) could also receive Regulations on access to the cooperative housing stock municipal guarantees for the financing of refurbishment A full 75% of common housing (Almen) is accessed through work on their property.6 open and transparent waiting lists managed by the housing associations themselves and which any citizen can sign up Maintenance of the model over time for. The remaining 25%, however, are reserved for the city council’s social housing waiting list. Regulations on housing equity and the commodification of dwellings Until 2004, city councils could also intervene in the use As mentioned, rent paid by common housing (Almen) of cooperative housing (Andel) that had received public tenants is calculated on a yearly basis to represent 3.4% support. If a house in one of these cooperatives was left of the initial development costs and is adjusted each year vacant, the city council could buy the right-to-use or rent it for up to 75% of the inflation rate (or salary inflation rate, out on a preferential basis. However, the city council could whichever is lower). Consequently, rent prices are both not control more than 10% of the cooperative’s housing at stable over time and decoupled from market prices. any given moment.5 As of today, tenants can buy their homes as individual Subsidies to maintain affordability property if 2/3 of the residential complex assembly agrees, Common housing (Almen) tenants may access general the city council grants approval and the parent housing subsidies for rent and close to half of them do benefit from association cannot prove that doing so would be financially such assistance. According to data provided by the Ministry detrimental to it.7 This possibility has only existed of Housing in 2014, direct subsidies granted to tenants in this sector represented 0.5% of the GDP. 5 Cooperatives Act (Andelsboligloven). Chapter 11a, 160b, PCS 4. Private housing cooperatives with support. (www.retsinformation.dk/Forms/R0710.aspx?id=26144 , removed in 2004) Moreover, the collective savings of the common housing 6 Cooperatives Act (Andelsboligloven). Chapter 11a, 160e. Private housing cooperatives with sector are mutualized by the National Building Fund support. (www.retsinformation.dk/Forms/R0710.aspx?id=26144, removed in 2004)

(Landsbyggefonden, LBF). This mutual fund is sustained 7 Ministry of Social Affairs (Socialministeriet), 2011. Lov om ændring af lov om almene through mandatory fees paid by all the associations and, boliger m.v. (www.retsinformation.dk/Forms/R0710.aspx?id=136592) case studies since changes were made by the conservative-liberal administration in power from 2001 to 2011. 56 The property of private housing cooperatives (Andel), however, can only be transferred to another cooperative. Alternatively, tenure may be changed only to rental housing. A key element in this model is the regulation of the price of member shares in the cooperative’s collective property. These cooperatives may choose between three methods to set the value of their property and determine the price of each share: (1) the initial purchase or development costs of the property, (2) an appraisal of the property as a rental building conducted by the tax authorities or (3) an appraisal based on the same criteria but conducted by a private appraiser. The value of the building as a rental tenure is established as a point of reference for these cooperatives, given that the rental market is regulated. In light of all this, however, the liberalization processes in the rental market and changes made to regulations of the cooperative sector since 2004 have led to a significant increase in price ceilings have made the purchase price of shares and, thus, access to cooperative housing, considerably more expensive.

References

Gibb, K. et al. (2013) Innovative Financing of Affordable Housing: International and UK Perspectives, York: Universitat de Glasgow, 35-37. case studies

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Porto 15 (Bologna, Italy). Source: La Dinamo Lazio (Italy) case studies Luisa Rossini 59 The research of the Lazio case study has been done in collaboration with

Introduction and context growth between the 1970s and early 1980s, then again in the Italy has a remarkably long tradition of cooperative 1990s, with a real housing development boom lasting until housing. One of the first housing cooperatives was founded mid2007. Since then, cooperative housing construction has in 1884 by the workers of a tobacco factory in Bologna, decreased substantially. Emilia Romagna, a region well known for its particularly successful cooperative movement. From the late 1800s According to the Italian National Institute of Statistics to the 1920s, thousands of cooperative housing units (ISTAT),2 in 2015 there were 8,794 cooperatives active in were built. Following World War II, the cooperative the housing sector, representing 14.9% of all cooperatives movement played a major role in post-war reconstruction. active in Italy. There are two main types of housing The political culture of anti-fascist liberation supported cooperatives: “conventional housing cooperatives and cooperativism, regarding it as a nonspeculative form of social housing cooperatives (cooperative convenzionali production and social gathering. Thus, legislative changes and cooperative sociali, respectively).3 In the first – and were made to facilitate the development of cooperatives. most common – type, co-op members become owners of For example, Article 45 of the Italian Constitution enacted the dwelling they are allocated. In the second type, the in 1947 explicitly recognizes cooperatives. A general law on cooperative builds dwellings that become part of its assets cooperatives, known as the Basevi Law, was also adopted in and are leased to members indefinitely, while still belonging 1947 to regulate the affairs of cooperatives and implement to the cooperative. Common-ownership cooperatives a model of indivisible reserves completely exempt from corporate tax. Law no. 59/1992 was adopted to provide 1 All cooperatives, including housing, are required to invest 3% of their annual profits in the fund. After 12 years, the COOPFOND has accumulated over €240 million, which is available the cooperative movement with another major financial to Italian cooperatives. 1 development mechanism: a national solidarity fund 2 ISTAT (2019) “Struttura e performance delle cooperative italiane” report. known as Coopfond (Fondo Promozione Cooperative) was 3 As recognized by Royal Decree no. 1165/1938. A new type of short-term or open-ended established. The cooperative housing sector experienced cooperative for rentals has been added to these two models. case studies (cooperative a proprietá indivisa) are zeroequity calls for public/private partnership housing programmes. cooperatives and are considered a subset of social housing The public sector offers land, financing and tax breaks to 60 cooperatives.4 meet housing needs by lowering the cost of renting (mostly) or owning housing as compared to the open market.9 Italy has three main housing cooperative federations, established between the 1950s and early 1960s: AGCI, Housing cooperatives can access public regional calls for Federabitazione-Confcooperative Habitat and Legacoop public/private partnerships alongside other subsidized Abitanti. These three federations have established an housing developers. Since the state-wide housing reforms alliance called Alleanza delle Cooperative Italiane (ACI) introduced by Law no. 431/1998, the planning, design, and aimed at promoting a bigger role for cooperatives building and maintenance of social housing has fallen under in building a more equitable and sustainable market and regional competence, while the national government has society. Home-ownership has historically dominated the played a more limited role in policy development, building Italian housing sector, representing 72.2% of the total regulations approval, data collection and information housing stock (about 35 million units)5, and this is reflected exchange. in the cooperative housing sector, as well. The data for each federation goes as follows: AGCI comprises 714 active A recent programme in the region of Lazio offers a valuable cooperatives, 39,986 members, and 90,000 dwellings, of case study on public policy that promotes zero-equity which approximately 70% are owned and 30% are rented;6 housing cooperatives through the self-rehabilitation Federabitazione-Confcooperative Habitat is made up by

966 conventional housing cooperatives, 117 social housing 4 Some estimates stated that by 1973 there were over 150,000 members of undivided cooperatives and 58 housing service cooperatives (servizi cooperative housing, of which over 69,000 lived in the northern region of Lombardy (Ronza, all’abitare), 71,500 members, and 165,000 dwellings 1975). Contemporary data on the sector is not available. 5 allocated between 1998-2018, of which approximately 85% Catasto edilizio urbano (2017). are owned and 15% are rented;7 Legacoop Abitanti is formed 6 www.agci.it. by 1,861 active cooperatives, 417,200 members, and 322,000 7 Data provided by Dr. Antonio Perruzza, Director of Confcooperative Habitat. dwellings, of which 84% are owned and 16% are rented.8 8 www.legacoopabitanti.it. 9 Subsidized housing policies are implemented according to Articles 35, of Law no. 865/1971 (the main piece of legislation for the entire public housing construction process) Cooperative housing production and Article 18, d.P.R. no. 380/2001. In particular, the procedure outlined by Law no. 865/1971 sets forth an initial acquisition phase of the area as municipal public property. Access to land and buildings 10 Lazio Regional Law no. 55/1998 - Self-rehabilitation of Real Estate; City Council Resolution no. 34/2001 - Approval of the final E.R.P. program; City Council Resolution no. Housing cooperatives can access public land and buildings 753/2002 - Approval of the call for tenders and draft agreement; Convention of the City alongside other subsidized housing developers through Council no. 110/2005 - Parameters for housing policies promotion. of public or private buildings in poor conditions.10 the self-rehabilitation and/or self-building cooperatives; e) case studies Selfrehabilitation cooperatives (cooperative di autorecupero) the conditions that must be met by the self-rehabilitation have emerged following the adoption of Regional Law and/or self-building cooperatives to participate in the 61 no. 55/1998 on Selfrehabilitation of Real Estate (Lazio) call; f) and lastly, the criteria for choosing the cooperative. (Felice 2014, 2015). The law was introduced in 1998 as a The Ministry of Infrastructure provides funding for policy tool to regularize situations of illegal occupation by the rehabilitation and, once the project is complete, the squatters, much like the 1982 legislative change in Berlin building becomes part of the public housing stock. The (Kranz et al. 1985). The law defines the entities involved law has been applied only in a small number of cases in the programme, which include provincial and city (just 17 since 1998) and mostly in Rome. Nevertheless, administrations, public housing companies (IACP), public it has fostered the creation of tenant-managed housing charity institutions (IPAB), and other local public entities. cooperatives through collaboration with public entities, Under the framework of the City Renewal Plans (Piani thus contributing to the creation of affordable housing. di Recupero), these entities can identify non-residential buildings that they either own or belong to another public Municipal governments are exclusively responsible for the or eligible private body. These properties must be vacant implementation of social housing policies and for selecting or almost entirely abandoned, and priority is given to social housing applicants. They approve the local Zone properties near city centres. The programme involves Plan for Low-income Housing (Piano di Zona per l’Edilizia the rehabilitation of the abandoned property and the Economica e Popolare) – a detailed development plan valid subdivision of its indoor spaces into single- and multi-family for 18 years – and can use expropriation as a tool to acquire dwellings. Part of the renovation work is to be carried out by and municipalize land in private ownership. Expropriation a cooperative formed by prospective tenants.11 involves buying land at a price defined by its intended use before it becomes a development area for social housing Once identified, the public entities acquire the properties (since the 2000s, this price is calculated based on the final eligible for residential use and make a public call for intended use). Following expropriation, the land can either tenders. The call announcement must include the following be leased through surface rights (diritto di superficie) – information: a) the buildings to be rehabilitated, as well usually for 99 years, after which it is returned to the city – as the location and a description thereof; b) a preliminary or, in exceptional cases, transferred with ownership rights project and initial budget calculation of the rehabilitation (diritto di proprietà) under financial conditions that benefit and construction work to be completed; c) the deadline the developers. for completing the rehabilitation work; d) an outline of the agreement, including a description of the work to be 11 Housing cooperatives established under this framework are: Cooperativa Vivere 2000, carried out by the owner and the work to be carried out by Cooperativa TECLA, The Cooperative Inventare l’Abitare, Cooperativa Corallo. case studies Housing cooperatives can propose areas to be included Following the introduction of the Regional Law no. 55/1998 in the Zone Plan for Low-income Housing. They can on self-rehabilitation cooperatives, the Lazio regional 62 also access land by paying ancillary fees (oneri accessori), government financed self-rehabilitation through a public usually consisting of the expropriation and urbanization guarantee of low-interest mortgage loans for rehabilitation costs. When the dwellings are sold or leased to cooperative costs not covered by the municipality. The city of Rome members, the cost of the expropriation procedure is negotiated special loans with Banca Etica, a national ethical included in the price and the municipality is, thus, bank. Mortgage loans were used by the inhabitants to cover refunded for these expenses. In fact, municipalities cannot refurbishment costs (tools and construction materials) and permanently allocate financial resources to housing and to pay construction companies, where necessary. must reach a zero-sum balance at the end of the operation. During the final phase of housing management, city Direct subsidies administrations are called upon to conduct the regular On a national level, social housing cooperatives can inspections of the locations and types of buildings under receive public subsidies and are bound by the provisions construction, the use thereof and, importantly, sale and of Royal Decree no. 1165/1938. Regional governments can rental prices.12 also directly finance housing cooperatives through public tenders for the construction of subsidized housing, as Access to financing mentioned above. Until the early 2000s, the central government financed cooperatives through an interest account (conto In the case of the Lazio rehabilitation programme, the interessi), that is, by paying mortgage interests on behalf Ministry of Infrastructure provides funding to the region of of the cooperative. In this way, the state was able to Lazio in response to its housing emergency. However, only finance cooperatives in instalments. Subsidized housing two calls have been made since the law came into force in cooperatives have access to public guarantees and low- 1998: the first allocated €3,500,000 (while the cooperatives interest loans (under the supervision of the Ministry of themselves raised €1,500,000), for a total of 97 dwellings Infrastructure, formerly the Ministry of Public Works). through the rehabilitation of six squatted schools. The Subsidized bank loans are reserved for subsidized second loan came from the municipal budget, representing housing cooperatives. The supervision of cooperatives a public investment of around €2 million. This was used for with tax contributions takes place at the national level the construction of 249 dwellings through the rehabilitation and is the responsibility of the Ministry of Infrastructure. of 11 unused public buildings and one convent.13 The Construction costs that are not covered by loans granted by

banks or other credit institutions are covered by the social 12 See Law 167/1962 (Legge Bosetti & Gatti); Law 865/1971; Law 179/1992, on regulations for fees paid by housing cooperative members. public housing. construction costs were funded by a subsidized loan regional calls for tenders that target specific groups in need case studies granted to the cooperative, for which the municipality of housing, such as young families, the elderly or disabled acts as a guarantor. The instalments are returned by people. In such cases, in addition to being co-op members, 63 the cooperative members once they are allocated the new residents must also comply with regional criteria. apartments, through equivalent monthly instalments in lieu of rent. In the case of the self-rehabilitation law for the region of Lazio, preference was given to individuals who were Indirect subsidies living in squatted buildings, mostly in public ownership, In Italy, cooperative housing developers are exempt from and thus considered at high risk of housing exclusion. taxes on construction costs. Housing cooperatives under By forming cooperatives, the squatters became eligible common ownership (a propietá indivisa) receive tax for regional and municipal tenders. Help desks were also benefits through Article 2 of Law no. 388/2000, Financial created for those interested in signing up for waiting lists Law for 2001 (Legge Finanziaria per il 2001). They also for subsidized housing from self-rehabilitation. According receive a discount on corporate tax (IRES, Imposta sul to Article 4 of Law no. 55/1998, self-rehabilitation and/ Reddito delle Società) based on the cadastral value of each or self-building cooperatives must be formed by more dwelling, which is equated to a under owner-occupancy. members than the number of housing units to be assigned; household income must not exceed the established limit At the municipal level, housing cooperative members are to access subsidized housing and members must not own exempt from municipal property taxes (IMU). another property in the region nor already be recipients of public housing. Such cooperatives must also refer to Technical support self-rehabilitation and/or self-building as their exclusive In the city of Rome, the office that oversees the Zone 167 purpose in their memorandum of association and include Plan – the national plan for the development of low-income criteria for ranking cooperative members on their housing housing, in accordance with Law no. 167/1962 – also offers allocation list in their articles of association. The building technical support to housing cooperatives. is then assigned to the cooperative, which is selected according to the parameters set by the tender notice. Access and management 13 The first rehabilitation was of the former convent of S. Agata in Piazza Sonnino, squatted since 1989 by 12 families (10 dwellings). In the following years, the programme Regulations on access to the cooperative housing stock extended to the following properties: via Monte Meta (16 dwellings); via Monte San Giusto Housing cooperatives usually assign dwellings to members (32 dwellings); via Marica (27 dwellings); via Appiani (17 dwellings); via dei Lauri (23 dwellings); via delle Alzavole (8 dwellings); via Saredo (11 dwellings); via Grotta Perfetta according to their articles of association. The procedure (18 dwellings); via F. De Grenet (8 dwellings); via Rigola (39 dwellings), for a total of 183 changes only when a cooperative development responds to dwellings. case studies Article 6 outlines ‘cooperative ranking and assignment’, References stipulating that the cooperative assigned to the building to Felice E. (2014) «De l’occupation a l’habitation», a Chaircoop (ed.) Les cooperatives 64 be rehabilitated must prepare its ranking according to the d’habitants, des outils pour l’abondance. Vol. 1, Lyon: Chaircoop, 271-297. criteria set forth in its articles of association and inform Felice E. (2015) Ri-abitare: Auto-recupero assistito del patrimonio pubblico (PhD), Roma: University of Rome Three. the owner entity within 60 days of signing the agreement Kranz, S. et al. (1985) «Gimme shelter: self-help housing struggles within and against the with the municipality. At the end of the rehabilitation, the state in New York City and West Berlin», in International Journal of Urban and Regional owner assigns the property units to cooperative members Research, 9/1, 15-46. according to the ranking and requirement checks. Relations between the members and the cooperative during the construction, assignment and rental phases of the property, however, remain governed by the cooperatives’ own regulations.

Subsidies to maintain affordability At the regional level, public funds can be used for primary rehabilitation, including structural work, exterior surfaces of the building (facades and roofs), and the building of common spaces.

Maintenance of the model over time

Regulations on housing equity and the commodification of dwellings If a housing cooperative decides to dissolve, its capital reserve must be transferred to the national solidarity fund for promoting cooperatives (COOPFOND) and cannot be distributed among its members (in line with the concept of an indivisible reserve).14

14 See Law 59/1992, ‘Nuove norme in materia di società cooperative’. case studies

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Housing creatd with the support of the Mitchell-Lama program. Source: Karl Davison New York (USA) case studies Eduard Cabré 67

Introduction and context The most common form of housing tenure in the US is In the United States, housing policies are defined by three home-ownership, representing 63.8% of housing in 2017, levels of government. At the federal level, public housing whereas just 36.2% corresponded to rentals. Nevertheless, policy over recent years has mainly consisted of tax in New York City, home-ownership makes up less than incentives for the purchase of housing and a comparatively one-third of housing (32.6%), as compared to 67.4% rentals.1 modest rental assistance programme – Section 8 – managed Cooperative housing is included under home-ownership by the Department of Housing and Urban Development and comprised some 400,000 units in 2018, or more than (HUD). From the end of WWII until the 1980s, however, 10% of total housing in the city.2 the federal government funded the construction of public housing throughout the country. This policy was Housing cooperatives are generally viewed as a solution for completely abandoned when Ronald W. Reagan took office, upper-middle- to high-income households, since, in many thus leading to the disappearance of public housing in most ways, they more closely resemble a model of condominium- states. In turn, state governments act as intermediaries in ownership than right-to-use cooperative structures in implementing federal programs at the local level. They also Europe do. In legal terms, residents of housing cooperatives offer subsidies of their own to local governments. Lastly, own shares in the entire building rather than individual local governments manage zoning and land use, property housing units and are entitled to occupy one of the houses taxes and public housing (where applicable). They also have under a fixed-term leasehold (usually lasting 99 years).3 specific funding programs for rehabilitation projects and to promote affordable housing, such as those run by the 1 U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates. New York City Department of Housing Preservation and 2 See www1.nyc.gov/assets/finance/downloads/pdf/reports/reports-property-tax/nyc_ Development (HPD). property_fy18.pdf case studies Each cooperative has its own rules regarding prices and in the 1990s, once the term of protection demanded in resale (initial deposits may range from 20% to 50% of exchange for public aid had expired or once members of the 68 the initial deposit for ownership) and establishes its own cooperatives had paid off these subsidies. Only 75 of these approval process for new members. buildings, with 45,000 housing units, still exist in New York as cooperatives.6 Within the sphere of housing cooperatives, there exists a subtype aimed at middle- and lower-income households New York City currently promotes public programmes known as limited equity cooperatives. These cooperatives that provides support for public and private building have lower resale prices and, therefore, more affordable tenants who want to purchase their building and manage deposits.4 While they do limit how much members may it as a cooperative. These programmes often receive earn when leaving the cooperative, these co-ops function public aid for rehabilitation in exchange for maintaining as described above for all intents and purposes. Moreover, housing affordability for a fixed period, which is they often offer new members financing options to cover calculated in relation to the subsidy amount received. the deposit, which may range from $10,000 to $20,000. The Small, multifamily buildings that are very expensive and non-profit organization Urban Homesteading Assistance difficult for city offices to lease are often the main focus Board (UHAB) is a pioneer in providing both financial and of such programmes. Many of these buildings ended up in technical support for this type of cooperative.5 the hands of city council due to tax evasion, which was a relatively common practice in the 1970s and 1980s, when Cooperative housing production the population was declining. Historically speaking, one of the initiatives that led to the construction of the most cooperative housing in One such programme is the Tenant Interim Lease Program,7 New York City was the 1955 Mitchell-Lama programme, which allows tenants of city-owned buildings to become promoted by New York State Senator MacNeil Mitchell and owners of said units as a cooperative. As part of this Assemblyman Alfred Lama. Under this programme, private programme, the Affordable Neighborhood Cooperative contractors built cooperative housing for low- and middle- income households using private property that had been 3 See furmancenter.org/files/publications/coopcondoarticlejuly23_2006_1_1.pdf expropriated by local jurisdictions. 4 See uhab.org/sites/default/files/doc_library/Limited_Equity_Cooperatives_A_Legal_ Handbook_0.pdf i leap-ny.org/wp-content/uploads/2015/11/limited-equity-coop-1.saegert. It is estimated that more than 100,000 units were built pdf. under this plan, which is still running today, although it 5 See www.uhab.org and uhab.carto.com/viz/9bf4515c-fef is now focused on providing support to already existing 6 See streeteasy.com/blog/what-is-mitchell-lama-housing/. projects. That said, most of these units were deregulated 7 See furmancenter.org/coredata/directory/entry/tenant-interim-lease-program. Program finances housing rehabilitation by a private is currently limited to refinancing existing cooperative case studies contractor who is also responsible for organizing the projects, however. community and equipping it with the skills and resources 69 needed to manage itself as a cooperative. Public funding is At the local level,the Affordable Cooperative Housing provided in the form of a low-interest loan from the City Program (which no longer exists) offered low-interest Council and long-term financing from private lenders and loans for the construction and permanent mortgage of the New York Affordable Housing Corporation. cooperatives.11 Likewise, the Small Homes Scattered Sites Loan Program (which no longer exists, either) offered Under a similar model known as the Third Party Transfer funding for the purchase of small, public infill sites.12 Program, ownership of buildings expropriated by the City Council due to tax evasion is temporarily transferred to Today, cooperatives can access low-interest loans offered by the non-profit organization Neighborhood Restore, which the local HPD under conditions similar to those granted by stabilizes and rehabilitates so they can later be transferred non-profit and low-profit housing developers. to the residents grouped together as a cooperative or non- profit organization.8 Direct subsidies Low-Income Housing Trust Fund Program: Provides Likewise, the New York City Council supports several subsidies to eligible low-income applicants to construct initiatives to create new Community Land Trusts (CLT) housing, rehabilitate vacant or underutilized housing, or in the city. The current program is funded and managed make vacant or underutilized non-residential property by the non-profit organization Enterprise Community into suitable for residential use, with the goal of becoming Partners (with funds from legal agreements with banks)9 renters, owners (of condominiums) or cooperative and is aimed at promoting the technical education of members.13 organizations interested in promoting CLT in the city and providing financial support to those which already own property. The City Council is presently in debate over whether to allocate part of its annual budget to supporting 8 See furmancenter.org/coredata/directory/entry/third-party-transfer-program. these initiatives.10 9 See ag.ny.gov/press-release/attorney-general-james-announces-8-million-grants-fund- affordable-housing.

10 See www.neweconomynyc.org/2019/06/nyc-takes-bold-action-to-address-the-affordable- Access to financing housing-crisis-by-supporting-community-land-trusts/.

The Mitchell-Lama programme offered low-interest 11 See furmancenter.org/coredata/directory/entry/affordable-cooperative-housing-program. mortgages subsidized and guaranteed by the federal, state 12 See furmancenter.org/coredata/directory/entry/small-homes-scattered-sites-loan- and New York City governments. This line of funding program. case studies Urban Homestead Program (no longer exists): Granted mortgage with a 10% deposit and 5% fixed interested rate $10,000 to co-housing units that had illegally occupied as a reference). 70 vacant buildings in poor conditions to rehabilitate and inhabit them. Maintenance of the model over time The minimum affordability period for housing is generally Indirect subsidies proportional to the subsidy amount received. Therefore, Mitchell-Lama: Tax incentives granted by the federal, state both the Tenant Interim Lease Program and Third Party and New York City governments.14 Transfer Program/Neighborhood Restore set their affordability period based on the provisions of each Technical support financing agreement. Regarding technical support, the Tenant Interim Lease Program offers training programs in housing management. In the case of Mitchell-Lama housing, all buildings built before 1974 are subject to rent stabilization by law, while Access and management those built later may opt out of the program once the Under the Mitchell-Lama program, each development mortgage has been paid off. has its own waiting list, which is usually organized hierarchically by a governing board. Daily maintenance and management is generally consigned to a private subcontractor.

As for the Affordable Neighborhood Cooperative Program, once rehabilitation is complete, current residents pay a $2,500 deposit to become members of the cooperative, regardless of the size or location of the house. They also pay a monthly fee for maintenance, which is adjusted to housing size and the true cost of building maintenance. In the case of vacant units, or should one become available, they must be offered to households with an income between 80% to 120% of the area median income. The deposit is calculated such that households do not pay more than 33% of their annual income on housing, including the 13 See furmancenter.org/coredata/directory/entry/low-income-housing-trust-fund-program. maintenance fee and mortgage payment (taking a 30-year 14 See www1.nyc.gov/site/hpd/renters/mitchell-lama-rentals.page. case studies

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Image by De Nieuwe Meent, winner of one of the competitions to build cooperative housing in public land in Amsterdam Source: Time to Access i.c.w. Roel van der Zeeuw architects The Netherlands case studies Carles Baiges 73

Introduction and context1 1. Buying cooperative housing (Koopcoöperatie): Sitting Although once common, housing cooperatives were residents buy the house. This is a form of housing banned in the Netherlands after World War II. During cooperatives in which it is still possible for people to buy a the reconstruction, significant government subsidies home. were granted for public housing. The government was afraid, however, that members of housing cooperatives 2. Managing cooperative housing (Beheercoöperatie): would capitalize on the assets they had accumulated by Residents take over management but the house is owned by selling their subsidized houses, for example. Instead of a third party. Residents may indicate which parts they do cooperatives, only housing associations and foundations and do not want to take over. were allowed to be active in public housing. This changed with the 2015 Housing Act, which in Article 18a recognizes 3. Renting cooperative housing (Huurcoöperatie): The housing cooperatives as part of the public housing system in housing cooperative buys and takes over a piece of property the Netherlands. from a housing association and may then rent out the property or grant usage or membership rights. The article also gives tenants in the social housing sector who want to start a housing cooperative several rights Based on Article 18a and following the details of the for the first time. The article is further developed in the BTIV and RTIV, groups of residents may start a housing 2015 Decree on Admitted Institutions for Public Housing cooperative in homes owned by a housing corporation. (Besluit toegelaten instellingen volkshuisvesting, BTIV) But the 2015 Housing Act gives tenants no guarantee that and in the Regulations on Admitted Institutions for 2015 the housing cooperative will be completed. Although the (Regeling toegelaten instellingen, RTIV). The Dutch Ministry of Housing distinguishes between three models:2 1 From www.cooplink.nl/wiki/Wetgeving. 2 See wooncooperatie.com/informatie/wat-is-een-wooncooperatie/. case studies legislation allows residents to become ‘collective owners’ of municipalities better options to guide development, a residential complex, it does not set forth any provisions including the possibility of incorporating social or 74 making collective financing more accessible. In practice, affordable housing – rather than just housing – into this is a major stumbling block for initiative groups. This land-use plans3. Traditionally, Dutch municipalities make new legislation, therefore, only applies to social rented building lots available to housing associations at lower properties owned by housing associations. Tenants of private prices than those paid by private developers. In Amsterdam, and commercial landlords who want to start a housing social rented housing represents about 50% of the total cooperative can benefit from the knowledge and practical housing stock and the city owns 80% of the land4. developments that take place in housing cooperatives. In cities, most of the land is used under a leasehold Before the Housing Act, “in 2000, parliament adopted the (erfpacht) system in which the city is the landowner. There People, Preferences, Housing Memorandum (Mensen, are two leasehold systems: annual leasehold (jaarlijkse wensen, wonen). The policy demanded greater influence erfpacht), in which a fixed ground rent is established and for inhabitants on housing and the environment, as well as remains at that level permanently, or a pre-paid leasehold accessibility to the housing market, customized housing and (afgekochte erfpacht), in which the ground rent is adjusted more room for eco-friendly housing. A programme aimed every 50 or 75 years5. at turning 30% of housing production into selfdevelopment was implemented. [...] This process has changed the nature In 2017, the city of Amsterdam decided to start three of the situation: individuals now have more access to experiments for housing cooperatives: on Center Island, land to build on individually (PO) or as a collective client in the East (Archimedesplantsoen), and in the South (CPO), much like the German baugruppen. Since 2009, self- (Havenstraatterrein). Following a motion by the city building has become an urban strategy in some major Dutch council, a fourth location in Noord (Elzenhagen Zuid) was cities, such as Almere and Rotterdam. Almere expanded devoted to housing cooperatives (Platform31 2018b). this strategy, guiding citizens through the planning process and training civil servants accordingly. It also facilitates baugruppen to make self-development accessible for

lower-income households through the I Built Affordably in 3 See www.researchgate.net/publication/282653626_The_Netherlands_the_public_ Almere Strategy, or IBBA”. development_of_land. 4 See webcache.googleusercontent.com/search?q=cache:OziOQ_vLqqcJ:citiesintransition. Cooperative housing production eu/interview/co-housing-in-europe-2-vrijburcht-amsterdam+&cd=1&hl=ca&ct=clnk&gl=es. 5 See www.iamexpat.nl/housing/real-estate-news/who-owns-land-leasehold-ownership- Access to land and buildings netherlands&www.amsterdam.nl/en/housing/ground-lease/. Since just 2008, a new Spatial Planning Act gives As previously mentioned, after the 2015 Housing Act, dents’ group have agreed on. case studies groups of residents who want to start a housing cooperative It must also include regulations for complaints. in homes owned by a housing corporation have the If the housing cooperative succeeds, it shall receive 75 following options based on Article 18a and the provisions of payment for five years of maintenance. the BTIV and RTIV: Access to funding The cooperative must include at least five homes located There are no specific measures for access to financing close together. for housing cooperatives. However, they can apply for The majority of the initiators (50% +1) must have a subsidies for senior cohousing, even as a cooperative. maximum income of €38,950. These subsidies are granted by the Ministry of Health, After reporting their intention to set up a housing coo- Welfare and Sport. perative to the housing corporation, they must then be given six months to draw up a cooperative plan (business The Housing and Care incentive scheme6 offers a subsidy plan). for the beginning phase of a residential care arrangement, in The housing corporation may not sell or demolish the which the feasibility of the initiative is tested. An estimated relevant homes for six months. 70 to 90 plans may receive subsidies in 2019. The residents’ group shall receive at least €5,000 to hire independent support (to be paid by the housing associa- The government guarantees 90% of banks loans for the tion). In practical terms, the residents’ group can report plan development phase. This scheme makes it possible to the costs incurred for hiring experts to the housing guarantee up to €10 million in loans for at least 50 projects corporation. The residents’ group and the housing asso- each year. ciation can also agree on an amount higher than €5,000. It is expressly mentioned that prospective members shall There is also a guarantee for a subordinated loan for 15% not report the hours they devote to the project or receive of the foundation costs during the construction and post- any form of compensation taken from this amount: pros- financing stage. With this guarantee, residents’ initiatives pective members shall have to invest their own time and and social entrepreneurs can get financing much sooner. resources into drawing up the plan. This is expected to guarantee loans for around 50 projects The cooperative plan must contain a proposal for how every year in the coming years. the independent maintenance and management of the houses shall be organized. The cooperative plan must also include the terms and 6 Platform31 (2018b) De wooncoöperatie, die komt er wél: www.platform31.nl/publicaties/ conditions of sale that the housing association and resi- de-wooncooperatie-die-komt-er-wel. case studies The ceiling on possible guarantees will be raised in the near providing bank for 90% of loans for up to €10,000 (90% future. As of 2021, the maximum amount of outstanding *€10,000 = €9,000) per home, with a project maximum of 76 guarantees might reach up to €164.4 million. €200,000. The remaining 10% (maximum €1,000 per home or €20,000 per project) is at the bank’s risk. There are also regulations from the Ministry of Health, Welfare and Sport on granting subsidies to encourage The state guarantees a maximum of 15% of the loan for home care arrangements7. The state provides a subsidy foundation costs. If the bank is prepared to lend 70% of the to work out a feasibility plan. In general, when applying foundation costs as a regular loan and the state guarantees for a subsidy, a vision document of the residential care another 15% as a subordinated loan, the remaining 15% arrangement, including an exploration of potential must be contributed by the participants themselves. residents and their wishes and budgets, has already been prepared. A maximum subsidy of €1,000 per home can be A total of €90 million is available for the scheme (guarantee obtained in residential care arrangements, with a €20,000 and implementation costs). Of this, €1 million is available maximum per project. The maximum duration of the annually for subsidies in 2019, 2020 and 2021. initiation phase is one year. There are several additional conditions to ensure sufficient commitment from the Direct subsidies participants and a strong probability of a successful There are no specific construction subsidies for housing feasibility plan. The government subsidy covers up to 50% cooperatives. However, it’s possible to apply for subsidies of the costs of the feasibility plan; initiators are expected for DIY construction (zelfbouw), even as a cooperative, in to contribute the remaining 50% on their own. A location cities such as Amsterdam9. must be selected before the subsidy is made available and the landowner must confirm that the location is available or The sustainable DIY construction subsidy offers: the municipality must declare that it is making every effort to find a location. In order to ensure that the feasibility €3,000 per home with an energy performance certificate study will be of sufficient quality, the subsidy requires that a (EPC) value that is 0.25 lower than that of the Building process supervisor support the initiators in drawing up the Decree at the time of applying for a subsidy for homes plan to carry out of the initiative. with an EPC value of –0.15.

Due to these requirements, the subsidy is generally provided 8 See www.rijksoverheid.nl/binaries/rijksoverheid/documenten/regelingen/2019/02/01/ conceptstimuleringsregeling-wonen-en-zorg/conceptstimuleringsregeling-wonen-en-zorg. to projects that have already made some progress in the pdf. initiation phase. If an accredited bank has made a binding 9 See www.amsterdam.nl/veelgevraagd/?productid=%7BA6E63C76-EE62-4CA6-BA84- offer for the development phase, the state guarantees the AC8B1EEDEDB0%7D. €5,000 per home with an EPC value of –0.15 or lower. levy exemption for small providers of social housing at a case studies national level 11. Lessors of social rental housing have to The maximum subsidy per new-build home is €5,000. If a pay a levy, which is calculated based on the property value 77 collective wants to build several new homes, the maximum (WOZ) of all homes with a rent below the liberalization subsidy for all construction is €200,000. limit (huurliberalisatiegrens), or the maximum amount established by the Government to determine what Similar measures exist in other provinces, such as qualifies as social housing. The scheme applies primarily Gelderland10, where there are subsidies for zelfbouw: to corporations, but also to private landlords in the social sector, including housing cooperatives that own property. €2,000 for process support in preparation for the appli- cation and formal establishment of a collective. To protect smaller agents, the first 50 homes are exempt. €10,000 for the preparation of a project plan for a CPO This means that social housing cooperatives are only housing project if it involves new construction; obliged to pay the landlord’s levy to tax authorities if they €12,500 for drawing up a project plan for a CPO housing own 51 houses or more. In such cases, cooperatives must file project if it involves existing construction or the demoli- a report with the tax authority, which will assess whether tion of existing construction with subsequent new cons- this tax must be paid on a case-by-case basis. truction. Technical support The province of Gelderland also offers an interest-free loan, The city of Almere has an information point for DIY for a maximum duration of two years, covering up to 65% of projects, although not specifically for cooperatives. the costs and a maximum of: Access and management €7,500 per home and up to €150,000 per CPO housing project if it involves new construction; Regulations on access to the cooperative housing stock €10,000 per home and up to €200,000 per CPO housing Projects that involve the construction of one or more social project if it involves existing construction or the demoli- rented properties rather than marketpriced rental homes tion of existing construction with subsequent new cons- truction. 10 See decentrale.regelgeving.overheid.nl/cvdr/xhtmloutput/Historie/Gelderland/ Indirect subsidies CVDR390394/CVDR390394_18.html. 11 Platform31 (2018a) De wooncoöperatie als verhuurder. Wettelijke kaders en adviezen There are no specific indirect subsidies for housing voor initiatieven: www.cooplink.nl/mediawiki/documents/2018-11%20De%20 cooperatives. However, there exists an interesting landlord wooncooperatie%20als%20verhuurder%20-%20Platform31.pdf. case studies benefit from a discount on the land value. For example, in constructie)14 makes it possible for an existing residential the Amsterdam Centrumeiland Pilot Wooncoöperatie, a community to set up a housing cooperative without starting 78 discount on the land value of €361 per m² of surface used capital. for social rent (excluding VAT) applies12. Subsidies to maintain affordability Housing associations still play a significant role in Dutch The Dutch government typically subsidizes housing for housing. The 2015 Housing Act forces housing associations people with low incomes, thus allowing households from to support a group of tenants who want to start a housing any social group to access almost any community, regardless cooperative in one of their properties but they are not of income level. obliged to sell. There are no specific subsidies to maintain affordability for The act also gives tenants who want to start a housing housing cooperatives. However, their members can apply cooperative several rights for the first time but no for the general housing allowance, which is provided by guarantees that the housing cooperative will be completed. the tax authorities to the individual tenant. The landlord is Although the legislation allows residents to become only indirectly involved and it makes no difference whether collective owners of a residential complex, it does not set it is a corporation or private party. The housing allowance forth any provisions making collective financing more is calculated based on extensive parameters and formulas. accessible. In practice, this a major stumbling block for Tenants can apply for the housing allowance on their own initiative groups. Housing corporations are also not obliged if they are 18 or older and are registered at the address to sell their properties or give them to housing cooperatives. of the property. Only one tenant may receive a housing Landlords are not obliged to take any action if they do not allowance per home. Nevertheless, the Tax and Customs want to. The Housing Act only obliges them to give the Administration analyses household composition, age, joint resident group a chance by providing six months to discuss income and individual rental price of the home. It also looks it and by granting at least €5,000 to develop a cooperative at the assets of the applicant and any partner or co-resident, plan13. including savings and investments. As an exception, in some care situations, it is possible to deviate from this process. There also exists a scheme by which housing cooperatives can slowly buy the property without having to make the

entire investment at once. After identifying the limited 12 See www.amsterdam.nl/wonen-leefomgeving/zelfbouw/projecten/centrumeiland-pilot/.

company (B.V.) that owns the house, the cooperative buys 13 See www.cooplink.nl/wiki/Wetgeving.

shares in the company. The more shares they buy, the 14 See www.cooplink.nl/wiki/B.V._constructie. more control they have. So-called B.V. construction (B.V. If housing cooperatives want their residents to request case studies the housing allowance, they must offer a regular lease for houses with a rent below the liberalization limit. The 79 housing allowance is only granted to independent houses in the regulated social segment. The starting point is the rent at the beginning of the lease. Thus, even if the rent later exceeds the current liberalization limit due to annual increases, the right to rent allowance remains intact. Conversely, if the housing cooperative moderates or even reduces rent, while the income of the tenant increases, at some point they may receive less or even no housing allowance. Housing allowance and the ratio between rent and income are communicating vessels.15

Maintenance of the model over time

Regulations on housing equity and the commodification of dwellings The Netherlands’ strongest method for restricting the commodification of housing is binding it to urban planning and the terms of land lease agreements. For example, Article 9, Use in Accordance with the Destination, of the 2016 General Provisions for Perpetual Ground Lease states that ‘the leaseholder is obliged to use the parcel in accordance with the intended use and the permitted use as included in the leasehold deed’.

15 Platform31 (2018a) De wooncoöperatie als verhuurder. Wettelijke kaders en adviezen voor initiatieven: www.cooplink.nl/mediawiki/documents/2018-11%20De%20 wooncooperatie%20als%20verhuurder%20-%20Platform31.pdf. case studies

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Îlot Fleuri Housing Cooperative (Quebec) Source: Jeangagnon (Wikimedia Commons) Quebec (Canada) case studies Max Gigling 81

Introduction and context1 former Housing Cooperative Federation (founded in 1948) The Quebec model of rental housing cooperatives has been became the Co-op Habitat Federation in 1969. functioning since 19732 and has created approximately 30,000 affordable homes distributed among 1,300 Co-op Habitat was designed as centralized organization cooperatives, providing housing for 60,000 people.3 where professionals and specialists took precedence, leaving little room for members of cooperatives. This Before the creation of rental housing cooperatives, bureaucratic model, in which members did not play a role Quebec had experimented with other models of housing in managing their cooperative, failed and in 1971 Co-op cooperatives. Starting in 1941, construction cooperatives Habitat filed for bankruptcy. were founded to promote access to home-ownership after the housing shortage of the 1930s due to the Great However, thanks to two political initiatives, the situation Depression and the aftermath of World War II. These continued to evolve. On the one hand, in 1973, and in cooperatives mostly built single-family homes, which they spite of housing being under a regional competence, the sold to their members. Canadian government made use of its funding capacity through the National Housing Law to promote the first In the early 1960s, a new formula was introduced. A programme to develop rental housing cooperatives, which study group formed in 1964 by the Quebec Council for was followed by other federal programs until 1993. Cooperation concluded that the housing cooperative movement should develop government-subsidized housing 1 The author would like to thank Pierre-Alain Cotnoir, secretary of the FECHIMM, for his valuable contributions. units for low-income households. This group introduced 2 To learn more about the history of the movement, see, for exemple, Légaré et al. (2012) the principle of perpetual collective property, by which and AGRTQ et al. (2002). cooperative members are both individual tenants and 3 See agrtq.qc.ca/wp-content/uploads/Les-enjeux-prioritaires-de-lhabitation- collective owners. As a result of this group’s work, the communautaire-et-sociale-pour-les-%C3%A9lections-2018-.pdf. case studies On the other hand, after the Parti Québécois (Quebec Some special features of the housing cooperative model Party) won the 1976 elections, the Quebec government in Quebec 82 introduced an action plan in 1977 for the creation of In Quebec, housing cooperatives are rental cooperatives. housing cooperatives. Taking advantage of funding by the Members are not required to provide individual capital federal program, the Quebec government took out a loan but,4 rather, the cooperative’s obligatory social fee, which is and launched the Logipop programme through the Quebec around €200 at most. Housing Society (Société d’habitation du Québec, SHQ). From a legal perspective, a cooperative is the owner of the The Logipop programme was aimed at promoting smaller building it manages and rents housing units to its members. sized cooperatives. It offered a subsidy for the creation of Tenants are members of the cooperative and are responsible small housing cooperatives managed entirely by members. for managing it (SHQ 2014: 1). To guarantee the technical support required by cooperative members, a network of Technical Resource Groups (GRT) Unlike other Canadian provinces, where cooperatives was also created. Several hundred housing cooperatives are generally large and managed by paid staff, the 1,300 rapidly emerged. cooperatives in Quebec are, for the most part, entirely managed by their members and comprise 20 housing units, In 1993, the conservative federal government in power on average. Even so, there is a wide range of sizes, ranging eliminated the housing cooperative programme despite from 3 to more than 800 units. evaluation reports that deemed it one of the best governmental programmes in terms of cost-benefit. Over time, federations (second-level cooperatives, Just 25 years later, in 2018, the federal government once according to Quebec legislation) arrived to offer helpful again introduced subsidies for the creation of housing services for cooperative members, such as insurance cooperatives. service, management support, accounting, financial investments, property inspections and construction Quebec had already experimented with several oversight, training, assembly mobilization, etc. Today, these programmes for the development of housing cooperatives services make management and community life easier for but without allocating a significant chunk of its own many cooperatives. resources. However, given the shortage of federal financing since 1993, the Quebec government decided to create the AccèsLogis Québec programme in 1997, which was bold 4 The third principle of of the 1977 Quebec Manifesto of Housing Co-operatives (Manifeste enough to cover the missing federal funding. des coopératives d’habitation) establishes that ‘a housing co-operative must be and must remain a collective property, which does not seek individual accumulation of capital, but rather the accumulation of collective capital’. The Quebec model bolsters social diversity. Generally in the contract. The contract, however, offers a reduction case studies speaking, housing cooperatives have an even mix of of up to 50% on rent for members in compensation for low- and middle-income – although usually not enough their participation in the cooperative’s activities. In this 83 to afford to own a home – households. To the extent to regard, members’ participation in the cooperative cannot which the right to membership endures regardless of the be considered ‘free’ work since they receive financial evolution of income, there are often middle- to high-income compensation for it. households, as well over the course of time. A portion of housing is eligible for rental assistance programmes so that As for their organization, each housing cooperative has low-income households can access cooperatives. These a governing board, usually formed by five directors, programmes subsidize the portion of rent that exceeds 25% and various committees: a committee for selecting new of household income. members, a maintenance committee, secretary committee, finance committee, cohabitation committee, as well as other In accordance with the requirements of the AccèsLogis potential committees depending on the priorities of each Québec programme, rent paid by members of cooperatives cooperative. should range from 75% to 95% of the median rent in the area where the cooperative is located. The initial rent of Cooperative housing production newly formed cooperative often comes close to the 95% Historically, programmes run by the Quebec government maximum limit in order to cover all expenses and guarantee have prioritized subsidies for production, whereas those the cooperative’s financial viability. In time, rent is adjusted run by the federal government have emphasized assistance based on the evolution of expenses, while staying within the in operations (AGRTQ et al. 2002: 14). aforementioned limits. The AccèsLogis Québec programme – currently the Over the medium to long term, the evolution of rent in main source of funding for new cooperatives – does not the cooperative will stay lower than that of rent on the distinguish between these two concepts. The different free market. This is partially because paying off mortgage types of programme assistance are laid out below to offer an loans requires less of the budget, and partially because the overall view. cooperative rent prices only reflect the evolution of real expenses and not that of land or building value. Therefore, Production phase: cooperative rent prices progressively distance themselves Production subsidies from AccèsLogis Québec: from market price, giving rise to a difference often referred Mortgage loan guarantee to as ‘occupancy rent’ for members. In fact, in several Production subsidy (50% of eligible expenditure) cooperatives, rent matches the market price, as established Supplementary subsides under specific conditions case studies During the production phase, cooperative projects (emphyteusis) for the property, lasting at least 50 years and financed through this programme must also include in exchange for the payment of a fixed fee (SHQ 2017a: 1). In 84 community assistance. This can come from a wide most cases, however, cooperatives are land- owners. variety of entities and take on numerous different forms. However, in most cases, it comes from the municipality. Access to financing Cooperatives finance a portion of project production costs Operating phase: through a mortgage loan. This represents at least 35% of the Once operating, a portion of the cooperative’s housing total cost, although, in reality, it tends to be higher (see below). will be eligible for rental assistance. Apart from the AccèsLogis programme, there may exist Cooperatives take out the mortgage loan from a private other subsidies, such as those for rehabilitation. financial institute. This loan is backed by the SHQ and has a term of 35 years. It is paid off through rent payments. The Quebec Housing Society (SHQ) runs the AccèsLogis programme. However, municipalities can sign an agreement Direct subsidies with the SHQ by which management of the programme is Through the AccèsLogis Québec programme, the SHQ passed off to them, as is the case, for example, in the city of subsidizes 50% of eligible project expenses while not Montreal, the largest municipality in Quebec. exceeding the maximum cost limits established by the SHQ. Actual project costs may exceed this maximum limit, but To receive these subsidies, cooperatives must go through a always on the condition that the project’s financial viability long process designed to demonstrate future viability. is guaranteed and rent does not surpass 95% of the median market rent. Access to land and buildings The cooperative project may involve the construction Cooperative projects funded by AccèsLogis must also of a building, rehabilitation of an existing building, include assistance from the community (le milieu, literally, transformation of a non-residential building into a housing the environment). This contribution must represent at building, or the purchase of an existing building in liveable least 15% of eligible production expenses, although it may conditions. be reduced to 5% if the project respects all other financial viability parameters (SHQ 2017b: 17). To be illegible for subsidies, the project must include acquisition of ownership of the land and building, where The contribution from the community is usually provided applicable. Exclusively in the case of buildings owned by the by the municipality. However, it can also come from SHQ or a municipality may a cooperative have a ground lease a charity organization, private company, fundraising, crowdfunding, etc. This contribution can come in many Since the maximum eligible costs were not updated from case studies different forms: it may be financial aid, a land or building 2009 to 2018, the difference between the eligible cost and donation, a tax rebate, volunteer work by community true cost grew during this time. As a result, a growing 85 members to create the cooperative, etc. number of projects initiated during that period are on hold because they cannot guarantee financial viability due to low Depending on the location of the cooperative, obtaining this subsidies and the prohibition on raising rent above the limit community contribution may pose the biggest challenge. of 95% of median rent. In 2019, SHQ eligible construction Nevertheless, there are also municipalities that offer a expenses were increased by 25%, in the interest of more generic form of the contribution demanded by the unfreezing projects on hold due to insufficient funding.6 AccèsLogis programme. For example, the city of Montreal has signed an agreement with the government of Quebec The financial aid granted by the SHQ first takes on the and offers and additional subsidy for 15% to projects form of a loan and later becomes a sunk cost subsidy if submitted as of April 2018.5 the cooperative meets the conditions of the operating agreement signed with SHQ. This together with the contribution from the SHQ and the obligatory community assistance means that sunk Eligible costs include: cost subsidies may reach up to 65% of production costs, in Purchase of land and buildings, where applicable. which case the cooperative only has to bear 35% of the cost Cost of completing the rehabilitation or new construc- through a mortgage loan. However, these percentages are tion work. based on the maximum eligible costs, as determined by the Related expenses, such as legal expenses, fees from SHQ. In practice, eligible costs tend to be lower than real professionals – such as the Technical Resources Groups costs, meaning the cooperative will end up contributing a (GRT) –, financial fees, etc. larger amount. Purchase of furniture and electrical appliances. All applicable taxes and fees. Likewise, when evaluating the weight of subsidies, it is important to remember there are no operations subsidies. Cooperatives must, therefore, cover all expenses with 5 See ville.montreal.qc.ca/portal/page?_pageid=9337,112625600&_dad=portal&_ income from rent. Initial rent prices for cooperatives are schema=PORTAL. usually close to the limit of 95% of market rent, which 6 This increase in the maximum amount of subsidies was funded, however, by a significant shows that the subsidies granted for producing cooperatives reduction in the budget available for new projects. See the memo dated 22 March 2019 from the Association des groupes de ressources techniques du Québec (AGRTQ 2019) do not support too much of the amount required to ensure and the memo dated 22 March 2019 from the Confédération québécoise des coopératives financial viability. d’habitation (CQCH 2019). case studies A project may dedicate a portion of its surface area to non- Technical support residential use (to commercial premises, for example), in During the production phase, cooperatives must work 86 which case financial aid is limited to the residential part of with a Technical Resources Group (GRT) unless it can the project (SHQ 2017a: 8). demonstrate that, among its members, there are people with the qualifications required to perform the work In addition to housing, the residential part of the project usually taken on by a GRT. includes other spaces related to residential use: common areas. GRT are private entities but must be recognized by the areas used for project administration. SHQ. Cooperatives choose and hire the GRT of their own adaptation of land (garden, etc.). choice and pay the corresponding fees, which form part of the eligible expenses. Maximum prices are established by Projects may receive supplementary aid in specific cases, the SHQ. such as the following (SHQ 2017b: 2-6): adaptation of housing for people with disabilities. A GRT unites specialists in architecture, project projects located in areas where production costs are management and mobilization/training under a single higher. entity to develop both the real estate side of projects projects located in remote municipalities or those with a (architecture and management) and the cooperative side population below 2,500 inhabitants. (through the mobilization and training of members). Cooperative training and promotion is considered Indirect subsidies an essential factor behind the long-term success of a Rental cooperatives do not receive specific tax benefits. cooperative rather than accessory elements. Taxes and fees related to the project form part of the expenses that can be subsidized. As non-profit GRT have their own association, called the AGRTQ.7 organizations, cooperatives do not pay corporate tax. Cooperative federations, meanwhile, may have their own GRT, as part of the services it offers members. They do, however, pay land value tax (impôt foncier). This tax is calculated based on the market value of land and buildings and has increased considerably over the past 20 years due to the hike in property sale prices. Therefore, the housing cooperative movement is demanding that local tax administration be modified to grant subsidies for land value tax to housing cooperatives (FECHIMM 2019). 7 See agrtq.qc.ca/. Access and management also apply in the case of ownership solidarity cooperatives case studies (article 226.14). Regulations on access to the cooperative housing stock 87 Types of cooperatives and members Selection Cooperatives funded by the AccèsLogis Québec programme Cooperatives are exclusively responsible for selecting their must be rental housing cooperatives (coopérative members. Autonomous management of members is both a d’habitation locative) (SHQ 2014).8 prerogative and an obligation: for example, a cooperative can not sign an agreement with a municipal social services Generally speaking, these rental housing cooperatives entity by which it would have to reserve some of its units do not offer related services. Their objective is to ‘bring for households chosen by said entity (SHQ 2003: sec. 4.2). together individuals interested in becoming members of This helps maintain the autonomy of cooperatives, which is the cooperative to occupy one of their rental housing units’ considered an essential feature in the way they work. (SHQ 2014: 1). These cooperatives are considered a form of consumer cooperatives and are governed by Articles 221 to When a person leaves their cooperative housing unit, they 221.2.10 of the Quebec Cooperatives Act.9 In order to join have no power to decide who will occupy it next: the lease one of these cooperatives, individuals must have a signed agreement may not be passed off, transferred, or inherited. lease agreement with the cooperative and occupy one of Moreover, when the lease agreement is concluded, the tenant its housing units. Each housing unit is allowed to have one automatically loses their membership status.10 or two cooperative members, as stipulated by the articles of association of the cooperative in question (Art. 221). As regards the potential rights of non-members who have When a member leaves a unit, they automatically lose their resided in the housing unit of an exiting member, each membership status (Art. 221.1). cooperative establishes its own rules in its articles of association, complying with the corresponding legislation. In addition to this predominant model, the programme also The cooperative must find a balance between having finances the production of solidarity housing cooperatives. exclusive responsibility the selection of its members (as a In addition to rental housing, these cooperatives offer other related services too. They are not considered consumer cooperatives but, rather, a form of solidarity cooperatives 8 However, the programme also subsidizes the production of affordable housing managed by other types of entities, such as non-profit housing organizations (Organisme à but non that may also accept employees or other support figures lucratif OBNL). as members, in addition to the residents of their housing 9 Cooperatives Act (Loi sur les coopératives), RLRQ c C-67.2 §, accessed 23 May 2019, units (SHQ 2014: 1). Solidarity cooperatives are governed legisquebec.gouv.qc.ca/fr/ShowDoc/cs/C-67.2. by Articles 226.15, although articles on rental cooperatives 10 Article 221.1 of the Cooperatives Act. case studies principle) and the potentially legitimate desire of those who since it is very similar to social housing and leaves little shared the housing unit with the exiting member – especially room for autonomous management by the cooperative. It 88 spouses – to remain in said unit. also meant there was no relationship between rent price and member participation (AGRTQ et al. 2002: 20). As a It is worth noting that lease agreements grant members result, the AccèsLogis programme requires cooperatives the security of unlimited leasehold, so long as they respect to autonomously select members and create a mix of the cooperative’s participation and co-habitation rules. households with different income levels. Generally speaking, the inability to pay, when bona fide, does not violate the lease agreement, thanks to the possibility of Selection criteria and procedure obtaining rental assistance. Cooperatives have ample freedom to define their criteria and procedure for selecting future members. There exist Members’ income level some noteworthy differences as to whether the person or Cooperatives are targeted at people and households with household selected will be entitled to rental assistance or not. low incomes, who must continuously occupy the housing unit as their main residence (SHQ 2017a: sec. 5.9-5.10). In the case of housing without rental assistance, the selection is made based on criteria established by the Cooperative housing is affordable housing: cooperative, which may resort to external experts for rent prices may not surpass 95% of the median market assistance in defining them. rent and capital is not required to join a cooperative. Generally speaking, cooperatives funded by the AccèsLogis programme are required to establish selection criteria that Moreover, between 20% and 50% of cooperative housing favours low- and middle-income households (SHQ 2003). grants residents the right to rental assistance from the SHQ, The cooperative as a whole meets this condition through which covers the portion of rent that exceeds 25% of income. the percentage of housing it reserves for low-income households. It is also worth mentioning that, between 1986 and 1993, there was an experimental funding programme for While the cooperative must also ensure that residents of cooperatives aimed exclusively at low-income households. housing without rental assistance have sufficient income These were selected from a central applicant waiting list. to cover rent, income level is usually not one of the main The programme was known as the ‘Private, Non-profit selection criteria. Nonetheless, there exists empirical Programme’ (PSBL-P). However, it was concluded that the evidence confirming that rental cooperatives meet the goal format did not work well with the cooperative mechanism of offering housing to low-income households even in the case of housing without rental assistance. According to One fundamental aspect for cooperatives is that new case studies data published by the CQHC, in 2011, the average income members make a smooth integration into the existing of households residing in rental cooperatives represented community and participate actively in it. These aspects, 89 around 45% of the average income of all households in which are difficult to assess through procedures and Quebec. More than 90% of cooperative households had an objective indicators, are evaluated in an interview that income below the average income of all households (CQCH usually has significant weight in the selection process.12 2012a: 15). In practice, most cooperatives ask housing applicants In the case of housing that does grant residents the right to submit a cover letter. According to the Federation of to rental assistance, cooperatives must establish selection Housing Cooperatives of Montreal (FECHIMM), this letter criteria that comply with the ‘Regulations on low-rent must indicate:13 housing allocation’1 and receives an ‘Approval Certificate’ Household composition and desired size of the housing from the SHQ (SHQ 2012). unit. Household income. These regulations set forth the selection criteria for all Reasons for wanting to live in a cooperative. social and affordable housing that receives public funding Relevant work and volunteer experience. and also includes several specific conditions for coopera- tives, while still granting them ample room to define their Cooperatives also often ask applicants to complete a brief own selection criteria. Specifically: questionnaire.14 In the case of cooperatives, in addition to the general admission conditions established in the regulations, When a housing unit becomes available, eligible candidates applicants must meet the specific admission conditions are selected first based on household composition, specific laid out in the cooperative’s regulations (Article 14 of the regulations). Moreover, while Article 27 of the regulations establishes 11 «Réglement sur l’attribution des logements à loyer modique», RLRQ c S-8, r. 1 §, accessed 4 June 2019, legisquebec.gouv.qc.ca/fr/ShowDoc/cr/S-8,%20r.%201. classification and scoring criteria, Article 28 authorizes 12 In its 2017 recommendations on cooperative member selection policy, the Quebec cooperatives the right to establish different classification Confederation of Housing Cooperatives (CQHG) suggests giving a weight of 10 and scoring criteria. points to questionnaire responses and 45 points to the interview evaluation: www. cooperativehabitation.coop/wp-content/uploads/2017/03/Proposition-CQCH-dun- cadre-r%C3%A9glementaire.pdf.

In any case, internal requests from members who wish to 13 See fechimm.coop/fr/candidature-cooperative [accessed 4 June 2019]. change housing units are given priority and are evaluated 14 For example, the Coopérative d’habitation du Châtelet questionnaire: coopchatelet.org/ before external applicants who wish to join. images/Demande2011.pdf [accessed 4 June 2019]. case studies needs (accessibility, etc.), and income if the unit in question Large cooperatives may have several selection committees, is subject to rental assistance. such as one for each building in the cooperative.17 90 Eligible candidates are selected based on their presentation Once selected, many cooperatives require that new letter and completed questionnaire, where applicable, and members first complete a trial period. Cooperatives are are asked to grant an interview with the selection committee. legally authorized to include a trial period lasting up to six months in their regulations. During this period the In the interview, the committee attempts to assess whether individuals will be considered ‘auxiliary members’.18 or not the candidate will integrate smoothly into the coo- perative and participate actively. According to the CQCH, There is currently large demand for cooperative housing the following criteria should be assessed to evaluate such due to high rent prices in the private market. aspects:15 Candidate’s knowledge about cooperative housing and Subsidies to maintain affordability the lifestyle it entails. The AccèsLogis Québec programme prioritizes operating Community spirit. subsidies. The initially high cost of providing the A true desire to be involved in cooperative tasks and entire subsidy for the production phase borne by the activities. administration is later compensated by the low cost of the Specific skills that may be useful to the cooperative. operating phase (AGRTQ et al. 2002: 14).

It must also be evaluated whether or not the person will However, cooperatives may access other types of subsidies be able to pay rent, especially in households that are not that help them maintain affordability over time: rental entitled to rental assistance. This can be evaluated during the assistance for low-income households and different interview or through regular procedures used on the private rehabilitation subsidy programmes. rental market, such as credit rating and record of debt.

Some cooperatives only offer housing to certain groups 15 www.cooperativehabitation.coop/cooperative-dhabitation/devenir-membre/ [accessed or professions. In such cases, belonging to such groups or 4 June 2019]. professions forms part of the admission criteria. There may 16 See the selection procedure of the Lezarts rental cooperative: docs.wixstatic.com/ugd/ af3423_177af21ff8bc4527b0c2405f16093159.pdf [accessed 6 June 2019]. also be specific selection criteria. For example, the rental 17 For example, see the Member Selection Policy of the Coopérative d’habitation des Cantons cooperative Lezarts only accepts professional plastic artists, de l’Est: www.chce.coop/documents/475-politique-de-selection-1.pdf [accessed 6 June and the first phase of the selection process consists of 2019]. evaluating the candidate’s artistic capacity.16 18 Cooperatives Act, art. 221.2. Subsidies for monthly expenses government in 2007 thanks to cooperatives surpassed $15 case studies Between 20% and 50% of cooperative housing subsidized million, or some €10 million (CQCH 2012b). by AccèsLogis must be reserved for homes eligible for 91 the Rental Assistance Programme,19 that is, for homes Subsidies for building rehabilitation with an income below the income limit established by There exist different subsidy programmes for building said programme. Such households are entitled to rental rehabilitation, some specifically for housing cooperatives assistance from SHQ, which covers the portion of the rent and housing managed by non-profit organizations, and that exceeds 25% of income. others that are not aimed at any type of property in particular. Programmes aimed at cooperatives and non- The percentage of homes entitled to rental assistance can profit organizations may be limited to housing created occasionally exceed 50% or fall below 20%. In such cases, through specific funding programmes that respond to the the cooperative must work to get this percentage back specific needs of these types of homes. within the established limits when another housing unit becomes available. The following are examples of rehabilitation programmes: Federal government, National Housing Strategy, Should a cooperative face significant financial hardship due managed by CMHC (Canadian Mortgage and Housing to the vacancy of numerous housing units, the percentage Corporation): of homes subject to the rental assistance programme may Subsidies for the maintenance of cooperative and be temporarily increased to 100% to facilitate occupancy. affordable housing. Funds activities such as building However, as soon as the cooperative’s financial viability is inspection reports and operational viability analysis.20 stable enough, the number of households entitled to rental National Housing Co-Investment Fund, a stream of assistance will be gradually reduced to 50% as they become funding for renovation and rehabilitation. Loans and available. subsidies for the renovation and rehabilitation of affordable housing, including housing cooperatives, Rental assistance is not a measure exclusively for housing funded in partnership with other levels of govern- cooperatives. It is also offered in housing taken from ment.21 This new fund also offers a stream of funding the private market for affordable housing. However, the for construction, which means the federal government rent paid to owners of private housing is usually higher than the rent paid in cooperatives. Providing affordable 19 Programme supplément au loyer (PSL): www.habitation.gouv.qc.ca/espacepartenaires/ municipalites/acceslogis_quebec/programmes/acceslogis_quebec/participation_financiere_ housing through rental assistance is much more cost- de_base/programme_supplement_au_loyer_psl.html [accessed 5 June 2019] effective in cooperatives for the administration. The CQHG 20 See www.cmhc-schl.gc.ca/en/developing-and-renovating/funding-opportunities/ has estimated that the savings generated for the Quebec preservation-funding. case studies is once again offering funding for the production of regional federation of rental cooperatives for the first five rental cooperatives after having stopped in 1993. years. 92 Quebec Government, Community Housing Renovation Fund (Fonds ARHC). Loans for rehabilitating coopera- Maintenance of the model over time tive housing and housing managed by non-profit organi- zations.22 4.1 Regulations on housing equity and the Municipality of Montreal, Rehabilitation programmes.23 commodification of dwellings This programme is aimed at improving the condition of In its more than 40 years of history, the Quebec model of the housing stock through two types of aid: occasional cooperatives has demonstrated its capacity to generate reforms and comprehensive rehabilitation. The pro- housing that is affordable over the long term. In fact, not gramme is aimed at any home that meets the conditions, only do most of the cooperatives created still exist – even regardless of property type, but offers more favourable the oldest ones –, but they are the ones that offer the lowest conditions for cooperative housing and housing managed rents, generally speaking. by non-profit organizations. On the other hand, the continuity of cooperatives as an Sustainable management asset is explicitly guaranteed in legislation. The Quebec Another aspect involved in maintaining the affordability Cooperatives Act24 includes several asset protection of cooperative housing is sustainable management. measures for housing cooperatives if the building was The operating agreements signed by cooperatives with built, purchased, rehabilitated or renovated using public the SHQ set obligations for cooperatives regarding aid, which, in practice, encompasses almost all housing sustainable management. Moreover, Article 221.2.3 of the cooperatives in Quebec. Quebec Cooperatives Act, in force since 2015, introduces sustainable management requirements for all cooperatives Should a cooperative liquidate its assets, its housing shall that have received public funding at any point in time. remain cooperative housing. In fact, the balance of assets Specifically, it requires the constitution of sufficient must be transferred to another housing cooperative, a guarantee, technical inspection of the building every five years, a five-year plan for building maintenance, and a 21 See www.cmhc-schl.gc.ca/en/nhs/co-investment-fund---housing-repair-and-renewal- section on maintenance status in the cooperative’s annual stream.

report. 22 See fondsarhc.quebec/.

23 See ville.montreal.qc.ca/portal/page?_pageid=9337%2C115617623&_dad=portal&_ Likewise, in promoting sustainable management, new schema=PORTAL. cooperatives may be obliged to become members of their 24 Cooperatives Act. federation of housing cooperatives, a confederation of The fact that cooperative members do not contribute case studies housing cooperative federations or the Quebec Council equity to the cooperative either as an initial deposit or as of Cooperation and Mutuality (CQCM). The cooperative any other form of investment clearly limits the possibility 93 members shall hold a meeting to select one of these options of commodifying the cooperative. This is considered an (Article 221.2.10, Cooperatives Act). important issue in Quebec. In fact, disagreement about the obligatory maintenance of the principle of no individual The alienation, cessation or modification of use of the equity was one of the main reasons for the 2014 exit of cooperative’s property must be previously authorized by the the largest federation of cooperatives, the FECHIMM, Ministry (notwithstanding certain exceptions set forth in which was in favour of maintaining this principle, from the law, such as foreclosure) (Article 221.2.5). the Cooperative Housing Federation of Quebec, which is in favour of introducing the possibility of individual equity When the ministry receives a request for authorization, it (Zabihiyan 2017, Frenette et al. 2004: 205, Frenette et al. must inform the housing cooperative confederation, as well 2014). as the regional federation of cooperatives, where applicable, and take into account any observations they submit (Article 221.2.6).

Generally speaking, the cooperative must maintain the social or community function of the property (Article 221.2.4). Any act done in contravention of these articles is absolutely null (221.2.8).

The absence of any individual accumulation of equity inherent to housing cooperatives in Quebec eliminates financial barriers that could prohibit access to the cooperatives by people without savings. It also prevents any commercial value of the cooperative from ending up in private hands, thus limiting the de facto property value of the cooperative to its usage value only. Cooperative members are not owners, either individually or collectively, of the cooperative’s property assets. case studies References gouv.qc.ca/fileadmin/internet/documents/partenaires/acceslogis/guide_elab_chapitre_3. pdf. AGRTQ (Association des Groupes de Ressources Tecniques du Quebéc) (2019) «Aucun 94 nouveau logement social financé: une triste première en plus de 20 ans»: agrtq. SHQ (Société d’Habitation du Québec) (2017a) «Chapitre 5. Admissibilité des projets», in qc.ca/2019/03/nouveau-logement-social-finance-triste-premiere-plus-de-20-ans/. Guide d’élaboration et de réalisation des projets AccèsLogis Québec: www.habitation.gouv. qc.ca/fileadmin/internet/documents/partenaires/acceslogis/guide_elab_chapitre_5.pdf. AGRTQ (Association des Groupes de Ressources Tecniques du Quebéc) et al. (2002) «Intro IV. Programmes et subventions», in Manuel de développement de projet: agrtq.qc.ca/ SHQ (Société d’Habitation du Québec) (2017b) «Chapitre 7. Aide financière disponible», a wp-content/uploads/2012/02/Intro_IV.pdf. Guide d’élaboration et de réalisation des projets AccèsLogis Québec: www.habitation.gouv. qc.ca/fileadmin/internet/documents/partenaires/acceslogis/guide_elab_chapitre_7.pdf. CQCH (Confédération québécoise des coopératives d’habitation) (2012a) «Enquête sur le profil socioéconomique des résidents de coopératives d’habitation»: www. Zabihiyan, B. (2017) «Division idéologique au sein des coopératives d’habitation»: ici. cooperativehabitation.coop/wp-content/uploads/2015/01/Enqu%C3%AAte- radio-canada.ca/nouvelle/641280/cooperatives-habitation-division-ideologique. socio%C3%A9comonique-2012.pdf.

CQCH (Confédération québécoise des coopératives d’habitation) (2012b) «Mémoire sur l’apport social et économique des coopératives d’habitation»: www.cooperativehabitation. coop/wp-content/uploads/2015/01/M%C3%A9moire-sur-lapport-social-et- %C3%A9conomique-des-coop%C3%A9ratives.pdf.

CQCH (Confédération québécoise des coopératives d’habitation) (2019) «Budget 2019- 2020: Un recul historique et une rupture en matière de logement abordable»: www. cooperativehabitation.coop/actualites-et-evenements/nouvelles/budget-2019-2020-un- recul-historique-et-une-rupture-en-matiere-de-logement-abordable/.

FECHIMM (Fédération des coopératives d’habitation intermunicipale du Montréal métropolitain) (2019) «Pour l’attribution d’un statut fiscal différencié aux coopératives d’habitation»: cdn.fechimm.coop/uploads/documents/document/407/Memoire_ FECHIMM-consultations-prebudgetaires-Mtl_2019.pdf.

Frenette F. et al. (2004) «Les coopératives d’habitation à capitalisation individuelle», in Revue du notariat 106/2: doi.org/10.7202/1045801ar.

Frenette, F. et al. (2014) «La coopérative d’habitation à capitalisation individuelle: retour sur les voies de son accomplissement en droit civil québécois»: www.sommetinter.coop/ sites/default/files/article-scientifique/files/2014_16_frenette.pdf.

Légaré, O. et al. (2012) «Les coopératives d’habitation au Québec: histoire et membres fondateurs en bref», in Habitation Québec.

SHQ (Société d’Habitation du Québec) (2003) «Chapitre 4 Admissibilité de la clientèle», in Guide d’élaboration et de réalisation des projets AccèsLogis Québec: www.habitation. gouv.qc.ca/fileadmin/internet/documents/partenaires/acceslogis/guide_elab_chapitre_4. pdf.

SHQ (Société d’Habitation du Québec) (2012) «Guide sur le Règlement sur l’attribution des logements à loyer modique»: www.habitation.gouv.qc.ca/espacepartenaires/ contenu_commun/sections_avec_menu/guide_sur_le_reglement_sur_lattribution_des_ logements_a_loyer_modique.html.

SHQ (Société d’Habitation du Québec) (2014) «Chapitre 3. Admissibilité des organismes», in Guide d’élaboration et de réalisation des projets AccèsLogis Québec: www.habitation. case studies

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Nutclough Housing Co-operative, Radical Routes member (Hebden Bridge, United Kingdom). Source: Betty Longbottom (Wikimedia Commons) United Kingdom case studies Mara Ferreri 97

Introduction and context Act 1965). This contains statutory protection of the coopera- The United Kingdom has a long and diverse history of diffe- tive principles and requires co-ops to comply with the seven rent models for the relationship between public administra- internationally adopted co-op principles. tions and cooperative housing, as well as policy programmes to support and promote community-led housing solutions. In the early 1970s, the central government began providing Cooperative housing has existed in the UK since 1867. Today, support and grants to set up thirdsector housing organi- there are around 1,000 organizations that provide commu- zations, such as housing associations and cooperatives, nity-led affordable or social housing in the UK, sometimes for rentals for low-income people. In 1976, the central known as ‘mutual housing’. Half of these are ownership government also set up the Co-operative Housing Agency housing co-operatives (Gulliver et al. 2013). Overall, they (1976-1980). About half of all existing housing cooperatives own or manage over 120,000 units, which amounts to less were established between 1977 and 1987, many of which than 1% of the total housing stock. Around 240 of these orga- were tenant management cooperatives. In the late 1980s, nizations are housing cooperatives operating a total of 34,700 mass stock transfer of public housing for rental (at low or dwellings (BSF- World Habitat 2016); the majority, however, no cost) was the basis for a further impulse towards forms are very small, with a median of about 20 dwellings. Housing of tenant management of social housing through coopera- cooperatives are defined as housing organizations where tives and housing associations (Forrest et al. 1988). With members (residents) democratically control and manage devolved administrative powers since 1998, many legal fra- their homes. Some housing cooperatives own their proper- meworks and public policy interventions differ depending ties collectively, while others collectively manage properties on national boundaries: England, Wales, Scotland (SS n.d.) owned by the public sector or by housing associations (tenant and Northern Ireland. management coops). Legally, organizations are incorporated under the Co-operative and Community Benefit Societies Since the 2000s, there has been resurgent interest in com- Act 2014 (formerly, the Industrial and Provident Societies munity-led housing and experimentation with new models, case studies including Mutual Home Ownership Societies (MHOS) and Fully mutual associations require all tenants to be members Community Land Trusts (Fitzpatrick 2018), particularly in of the common ownership co-op. In fully mutual par value 98 England, where they were favoured by national legislation cooperatives (like those promoted by the network Radical such as the Housing and Regeneration Act (2008) and the Routes: Radical Routes 2004), everyone owns an equal Localism Act (2011). In the last decade, student organiza- value share in the co-op, usually a nominal £1. tions have been an important new actor in the creation of housing cooperatives in Sheffield, Birmingham and Edin- Cooperative housing production burgh, where the UK’s largest fully owned and self-mana- ged student housing cooperative is located.1 Access to land and buildings The construction of cooperative housing has usually In 2016, an annual fund of £60 million was established to remained at the margins of public housing construction support community-led housing groups across the UK. This programmes, but several existing housing cooperatives have is the single largest funding programme in the sector since benefitted from the shortterm or permanent stock transfer the 1970s and is leading to an important new wave of coope- of public housing. Sometimes the transfer was done at no rative housing construction. cost (in exchange for repairs) and the housing association or housing cooperative received a grant. In the late 1960s, Today, it could be said that there are broadly five main types municipal governments and other public institutions of housing cooperatives:2 started leasing vacant residential buildings, often after Fully mutual associations (most of which are called coo- they became squatted, to mutual housing cooperatives perative housing associations), which fall into two types: known as ‘short-life cooperatives’. By the mid-1980s, it Par value cooperatives was estimated that several hundred short-life cooperatives Co-ownership housing associations (set up with existed, managing over 15,000 dwellings (Bowman 2004). A government assistance) number of them later become tenant managed cooperatives Short-life housing cooperatives (subject to the same in properties owned by third-sector organizations. rules as fully mutual associations) Tenant management housing cooperatives The 1988 Housing Act introduced the possibility of stock Tenant management organization in formerly public pro- transfer of council housing rented to low-income families to perties transferred to non-governmental housing organi- zations, since 1988 (Stock Transfer Housing Co-operati- 1 ves and Community Gateway [England] and Community See edinburghcoop.wordpress.com/the-co-op/. 2 There is little agreement on categorization, even within the sector. See www.cds.coop/ Mutual [Wales] Housing Associations) community-led-housing/ and www.housinginternational.coop/co-ops/united-kingdom/ Self-build housing cooperatives (few) registered non-governmental housing associations in order and the London Borough of Lewisham. Liverpool, Leeds, case studies to improve conditions and governance. The introduction Hull and Middlesbrough have been at the forefront, in 1994 of the Right to Manage led to the creation of tenant transferring empty properties for nil or nominal prices, 99 management organizations (TMO) to manage public and usually working on long leaseholds and peppercorn rents third-sector housing for social rent. To date, around 170 rather than transferring freehold. In 2015, for example, the organizations are managing over 62,000 units. Some stock association Latch Leeds offered 99-year leases on housing transfer was approached through the Community Gateway units for a monthly rent of £14. In London, part of the work Model developed by the cooperative housing movement of the Community-led Housing Hub, established in 2018 by and Cooperative Development Society (CDS) and is locally the mayor of London, has been to support the construction controlled by the residents who have the right to become of new housing on plots of land that are too small to develop members by paying a nominal £1 for a non-equity voting commercially (ML 2019, CLHL n.d.). This includes small membership share (Rowe 2003). There are four Community plots of land belonging to Transport for London, which is in Gateway Associations in England, managing over 24,000 part publicly owned. social housing units. TMO are considered both a type of housing cooperative and mutual housing, even if they are Access to financing under public or third-sector ownership. The 1964 Housing Act established the Housing Corporation to provide loan capital for part of the cost of The Housing and Planning Act 2016 introduced the new cooperative schemes, housing and loan guarantees Right to Build, or the right for individuals and groups to to encourage building societies (a type of financial self-build housing, which was to be administered at the institution) to provide market finance. The 1974 Housing municipal level (local authorities). Local authorities have Act made capital grants available for non-profit housing a legal duty to keep a Right to Build register of people and schemes, such as housing associations and smaller housing groups wishing to build their own homes; this includes cooperatives. The 1975 Housing Rents and Subsidies Act any community-led housing organizations considering allowed co-ops to become registered housing associations new development. In 2013, the Cooperative Councils’ and access grants that could cover up to 90% of the cost Innovation Network was created to bring together of a scheme. Cooperative co-owners have also benefited cooperative groups and municipalities who have pledged from central government mortgage tax relief since the to support cooperative principles in their housing duties by providing property or land, changing local urban plans 3 CCIN (The Co-operative Councils’ Innovation Network) (2017) Community-Led Housing: and offering resources, including local government officers a Key Role for Local Authorities: www.councils.coop/wp-content/uploads/2018/01/ to support and develop partnerships.3 Among the 22 cities Community_Led_housing_Report_2017_web_version.pdf. participating today are Bristol, Glasgow, Leeds, Liverpool 4 See www.latch.org.uk/. case studies 1970s. Most fully mutual ownership housing cooperatives In London, in 2019, Mayor Sadiq Khan launched an were developed in the 1960s, 70s and 80s with government enhanced fund to support the work of the London 100 assistance in the form of capital grants to make rents Community-led Housing Hub: the London Community more affordable. In 2016, there were 243 of these housing Housing Fund (2019-2023), with total allocated funding cooperatives registered with and regulated by the Homes of £38 million as revenue and capital for community-led and Communities Agency, which regulates all affordable affordable housing developments. housing providers in the UK. Par value cooperatives with Radical Routes (around 25) were set up completely Direct and indirect subsidies independently from public funding and continue to operate According to the Cooperative and Community Benefit independently. New models emerged in the 1990s, such as Societies Act 2014, registered societies such as housing the public revolving loan funding or a housing association’s associations are companies for tax purposes and are liable loan facilities. to corporation taxes as regards their profits. Fully mutual housing cooperatives (FMHC), however, are exempt from In 2012, the Welsh government established a new policy this because fully mutual trading is not taxable. framework and dedicated a percentage of public housing funding to new build cooperatives: four projects have been As part of the 2017 Community Housing Fund, the UK completed and three are near completion, among a total of Central Government has created the Becoming a Registered 25 new schemes at different stages of development (WCC Provider/Investment Partner Programme (England), 2015). In 2017, the UK central government launched the which offers grants of up to £10,000 for community-led Community Housing Fund with a £60 million annual budget, organizations to become a Registered Provider (RP) with the largest public funding programme for community– the Regulator of Social Housing and/or an Investment led housing (including cooperatives) since the 1970s. In Partner (IP) with Homes England (CLH n.d.). England, the Fund is split between the Community-Led Homes Start-Up Support programme, which offers grants Technical support of up to £10,000 to start up a project, and the Community In the 1970s and 80s, there were national grant programmes Housing programme, which consists of two phases, each of for cooperative education and training for small and large which is allocated £163 million. The first phase covers the organizations. The Cooperative Housing Agency (1976- costs of community capacity building and professional costs, 1980) had an education officer and provided education and including feasibility studies, design work, application for technical advice. A grant from the Housing Corporation construction licenses and business planning, among other in 1976, for instance, helped set up a small Council of things. The second phase covers the costs of building new Co-ownership Housing Societies, which promoted homes and converting/refurbishing existing properties. cooperation between co-ops and regularly published a magazine (1976-1983) (Brichall 1991). In 2017, as part of the co-ops appoint a committee and consider applicants case studies the UK Central Government Community Housing Fund, according to housing need and the social focus of the ad-hoc regional community-led housing hubs have been cooperative. Different types of housing co-operatives that 101 set up to provide advice, support and grants to community received public funding at some point in their history have groups (CHF 2018). The Community-Led Housing Hubs to consider candidates from the social housing waiting list. work in collaboration with the Cooperative Development In the case of the Community Gateway Model for stock Society (CDS), an organization founded in the 1960s under transfer cooperatives, at least 50% of vacant units must be the name Society for Cooperative Dwelling, which provides filled by people from municipal waiting lists (Rowe 2003). services and advice to housing cooperatives and other Some cooperative housing organizations use a dual list, organizations. alternating between candidates from the local waiting list and those applying directly. A London-specific hub, known as the London Community- led Housing Hub, was established in 2018. It is a resource Subsidies to maintain affordability and advice office supported by the Mayor of London The UK has an extensive programme of social benefits (ML 2019). It provides funding (especially to cover to assist low-income individuals and households pay for feasibility studies) and advice to set up community-led rented housing costs (housing benefit allowances) both housing (including cooperatives), working with boroughs, in private, public and third-sector housing. Eligibility developers, housing associations, and funders. It is hosted criteria vary depending on the devolved national by CDS, the Cooperative Development Society, and the administration. In England and Wales, tenants of par value advisory group includes the National CLT Network, the housing cooperatives, short-life cooperatives and tenant Confederation of Cooperative Housing, and UK Cohousing. management organizations are entitled to claim housing benefits to cover rent payments. The only exception is Access and management tenants of co-ownership housing associations, who were historically not included in the Rent Act of 1977 and are Regulations on access to the cooperative housing stock therefore not entitled to housing benefits (SE n.d.). In Scotland, England and Wales, the majority of cooperative housing belongs to the social housing sector. Individuals Concerning refurbishment, the 1974 Housing Act and households who are eligible for public social rented enabled small cooperative housing associations and housing can apply to a housing co-op through the local short-life housing cooperatives to apply for mini housing municipal (council) waiting list and be nominated for associations grants, or mini-HAGs, which supported major vacancies. Alternatively, individuals and households can refurbishment and renovation of existing vacant properties also apply directly to a housing cooperative. Members of until 1982. In England, various funding programmes are case studies available for refurbishment by Registered Providers, which must be passed to another cooperative or a non-profit could include cooperatives in stock transfer properties. organization with similar aims and principles. 102 Recently, funding was available for community-led solutions (non-profit organizations, voluntary organizations and small scale registered housing providers) through self-help programs to refurbish existing vacant housing. Through the Empty Homes Community Grants Programme (EHCGP), £50 million in public funding have been invested by over 100 grassroots organizations between 2012 and 2015 to bring 1,299 homes (with 3,048 living units) back into use (Mullins 2018). The 2017 Community Housing Fund offers grants for community groups to purchase properties and refurbish them.

Maintenance of the model over time

Regulations on housing equity and the commodification of dwellings The lack of regulations on housing equity meant that the Right to Buy, introduced across the UK with the Housing Act 1980, enabled members of co-ownership housing cooperatives to buy their homes individually. By the early 1990s, most co-ownership societies went into liquidation (Birchall 1991). However, the Right to Buy did not apply to tenants in tenant management cooperatives or to fully mutual housing cooperatives.

In par value housing cooperatives, such as those promoted by Radical Routes, the ownership of houses and land cannot be divided among individual members. The property remains in common ownership from generation to generation, and if the cooperative is dissolved its assets References

Birchall, J. (1991) The Hidden History of co-operative housing in Britain, Uxbridge: case studies University of Brunel. Bowman, A. (2004) Interim spaces: reshaping London: the role of short life property, 1970 to 103 2000 (tesi), Bristol: University of Bristol. BSF-World Habitat (2016) «Community-led housing in England»: www.world-habitat. org/wp-content/uploads/2015/06/Community_led-Housing-in-England_History-and- Context.pdf. CCIN (The Co-operative Councils’ Innovation Network) (2017) Community-Led Housing: a Key Role for Local Authorities: www.councils.coop/wp-content/uploads/2018/01/ Community_Led_housing_Report_2017_web_version.pdf. CHF (Community Housing Fund) (2018): www.gov.uk/government/collections/ community-housing-fund. CLH (Community-led Homes) (s.d.) «Becoming a Registered Provider»: www. communityledhomes.org.uk/becoming-registered-providerinvestment-partner. CLHL (Community-led Housing Hub London) (s.d.): www.communityledhousing. london. Fitzpatrick, D. (2018) Governance of mutual housing in London (tesi), Londres: University College London: discovery.ucl.ac.uk/10047446/1/Fitzpatrick_10047446_thesis.Redacted. pdf. Forrest, R. et al. (1988) Selling the Welfare State: The Privatisation of Public Housing, Londres – Nova York: Routledge. Gulliver, K. et al. (2013) More than Markets: Mutual and Co-operative Housing in the UK, Birmingham: Human City Institute. ML (Mayor of London) (2019) London Community Housing Fund: www.london.gov.uk/ sites/default/files/london_chf_prospectus_0.pdf. Mullins, D. (2018) «Achieving policy recognition for community-based housing solutions: the case of self-help housing in England», in International Journal of Housing Policy, 18/1, 143-155. Radical Routes (2004) «How to set up a housing co-op»: www.radicalroutes.org.uk/. Rowe, S. (2003) Empowering Communities. The Community Gateway Model: twoworlds. me/wp-content/uploads/2013/02/EmpoweringCommunities.pdf. SE (Shelter England) (s.d.): england.shelter.org.uk/legal/security_of_tenure/housing_ co-operatives/rights_of_housing_co-operative_occupiers. SS (Shelter Scotland) (s.d.): scotland.shelter.org.uk/get_advice/advice_topics/finding_a_ place_to_live/housing_cooperatives. WCC (Wales Cooperative Centre) (2015) Co-operative Housing for any community in Wales. Available at: www.cch.coop/wp-content/uploads/2015/07/coop-housing-for-any- community.pdf. case studies

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Kalkbreite (Zurich). Source: semjon_13 (Flickr) Switzerland case studies Claudia Thiesen 105

Introduction and context Switzerland has no relevant public-housing construction Compared to European standards, the percentage of activity either at the national or local level. There is privately-owned housing in Switzerland is low: just 38% no tradition of large numbers of municipal housing of residents are house or condominium owners and 3% are associations. So, speaking about affordable housing means members of a cooperative. The Swiss are a nation of tenants. speaking about the so-called gemeinnütziger Wohnungsbau, or the non-profit housing sector, in which housing cooperatives and, to a lesser extent, housing foundations and municipalities act.

Non-profit housing in Switzerland only represents about 26,0% 5% of the market share, as estimated by the co-ops umbrella organization Wohnbaugenossenschaften Schweiz (Wbg- 56,5% Schweiz). This rate varies across the cantons (from 0.5% 12,0% to 11.3%) and, of course, even more so across cities and rural regions. There are about 2,100 housing cooperatives of public interest with an estimated 190,000 housing units in Switzerland. On average, the cooperatives are rather tenant or sub-tenant cooperative member condominium/apartment owner house owner others* small and only own about 80 flats. In the countryside, there are many small cooperatives, whereas in the cities, there Tenure of occupied dwellings, 2017 are older, larger ones. The region of Zurich has the most * *Dwelling provided free of charge by relative or employer, employee accommodation. Source: FSO cooperativeowned apartments, by far. case studies values’. In contrast, because cooperatives respond to their members’ demands, the needs of society are often 6,9% 9,9% 106 7,9% secondary or voluntary, depending on the organization’s 12,9% statutes, selfimage and focus. However, cooperatives are generally open to everyone and provide affordable housing to the public. Their members share responsibility not 14,9% only for their own apartments but also for the housing 46,5% community and the entire cooperative. Moreover, cooperatives often include non-economic aspects

Lake Geneva region Espace Mittelland Northwestern Switzerland and services, such as common spaces, charity funds, Zurich Eastern Switzerland Central Switzerland Ticino neighbourhood infrastructure, activities, co-determination, and social help and support. Cooperative housing by major regions (%) The success of Swiss housing cooperatives is based on When considering the housing supply, it is common to a long tradition. The first housing co-ops were founded speak of non-profit housing cooperatives. While there is during the process of industrialization between 1860 and no actual legal definition of non-profit status, for statutory 1910 in the cities of Basel, Bern, Biel, Zurich, Winterthur purposes the term generally refers to a cost rental model – and St. Gallen due to unbearable living conditions. in which the price of rent is used to cover costs – and the The housing shortage after World War I led to the first elimination of speculation. According to the 2003 Federal peak of housing cooperatives as cities, cantons and the Housing Subsidy Law (Verordnung zum eidgenössischen confederation actively supported housing. In July 1919, the Wohnraumförderungsgesetz), nonprofit organizations that Federal Assembly approved subsidies for the first time to wish to access to non-profit financial instruments must boost housing production. The city of Zurich, for example, meet the demand for housing with long-term sustainable ruled on guidelines to promote cooperative housing financial conditions. On that basis, the Federal Housing construction in 1924, thus laying strong foundations. Office stipulates the following: non-profit developers may not pay royalties, the distribution of dividends must That same year, the Zurich parliament defined support be limited, and any liquidation surplus must be used for instruments as low-cost land and building leases, municipal cooperative purposes. shares in housing cooperatives and residual loans with favourable conditions. Since 1931, housing subsidies In addition to meaning ‘non-profit’, the term gemeinnützig are anchored in the law. The breeding ground for this also refers to the notions of ‘common-good’ and ‘social policy was a combination of the great burden that cities – especially Zurich – were suffering due to oppressive The legal basis for leasing land in Switzerland is set out case studies housing shortages and their strong, social, democratic in articles 675 and 779-779l of the Swiss Civil Code of electorate. At that time, non-profit cooperative housing December 1907 (Schweizerisches Zivilgesetzbuch; SR 210), 107 became a widespread public concern, even for the which was later amended in 1965 (BG 19. March 1965; AS conservative and bourgeois parties. The biggest boom began 1965 445; BBl 1963 I 969). Nevertheless, only 5% of all real at the end of the World War II. The federal and cantonal estate property in Switzerland is based on land lease. authorities had learned from the hardship of 1918 and provided subsidies and cement quotas so the population The city of Zurich did not build for many years, although could build housing. Since 1965, support for non-profit this has recently changed. Currently, the City Council housing has been implemented through federal law still promotes housing through city-owned foundations that valid today, with some adaptations. However, since the late provide housing to specific target groups, such as the 1990s, the number of subsidized apartments has declined elderly (Stiftung Alterswohnungen), families with more sharply due to liberal forces and cost-cutting measures. than three children (Stiftung für Kinderreiche Familien), In 2011, a communal referendum anchored a basic article young people (Stiftung Einfach Wohnen) and homeless on housing policy to municipal constitutions. It calls for people or foundations working towards specific objectives, maintaining low-cost housing and commercial premises such as maintaining the affordability of housing and local and increasing the supply thereof. By 2050, the share of businesses (Stiftung zur Erhaltung von preisgünstigen non-profit apartments is to have moved from 25% to 33%. Wohn- und Gewerberäumen). However, considering the large amount of construction activity in the private sector and incredibly high property The conditions for leasing land vary across the country. In prices that make it nearly impossible for cooperatives to Zurich, they were established long ago: public land is leased buy land, it is not clear how or if this goal will be achieved. only to non-profit foundations or co-ops for 60 to 100 years maximum. Leaseholders pay annual rent for the right to Cooperative housing production build. This rent is calculated based on a lower theoretical land value than market value. This amount is proportional Access to land and buildings to total construction costs and varies from 16 to 20%. The There exists no standardized national model for the annual rent is indexed and adjusted every five years based distribution or use of public land. Some municipalities, on the nationwide standard mortgage interest rate and especially small ones, still sell their land to the highest the Switzerland consumer price index. At the end of the bidder; others, such as the cities of Zurich, do not sell land lease, the buildings are given back and the landowner large areas. Many cities lease land to foundations or pays a sum of compensation for the return. This policy co-ops with non-profit status. was implemented in Zurich in the 1960s (in the socalled case studies Richtlinie 65). At the end of 2018, the city of Zurich had 109 up to 75% of funding often comes from bank mortgages. In land leases underway. Taking into account projects under Zurich, city employees invest up to 94% of their pension 108 construction, a total of 5,300 apartments have been built on fund in second mortgages. Zurich also provides 10% of municipal land thus far. Moreover, there are 1,000 rooms stock capital and chooses one member (a city delegate) for for students and older people. the cooperative boards.

Numerous conditions, property restrictions and additional Direct subsidies agreements are established in the contract. Besides a From 1975 to 2001, the federal government promoted non-profit regulation, contracts stipulate conditions for housing construction and the acquisition of property based minimum occupancy, artsponsorship, energy standards, on the Housing Construction and Property Promotion Act ground floor and public use, and the implementation (WEG). Since 2003, federal aid has been granted under the of an architectural competition. Often, a percentage for Housing Promotion Act (WFG).2 subsidized housing (20-30%) is included in the contract and 1% of the space must be devoted to free communal use. In February 2007, the Swiss Federal Council decided to no longer grant direct loans. At the moment, funding is limited In Zurich, the land is leased through tender calls organized to indirect aid for housing cooperatives and other non-profit by the umbrella organization (Wbg-Schweiz). The final housing developers in the form of guaranteed bonds, a fund decision is taken by the municipality. In other cities, such for low-interest loans held in a trust by the co-op umbrella as Bern, the administration and competent department organizations, or counter guarantees. also organize the process. For a few years now, co-ops in Zurich have had to apply through an extensive process, Indirect subsidies demonstrating that they will fulfil the conditions and be Non-profit housing cooperatives are not exempt from able to finance the project. They are sometimes obliged to taxation. work with one of the communal housing foundations. This puts co-ops in competition with one another.1 Technical support The Zurich section of the co-ops umbrella organization Access to financing Wbg-Schweiz3 supports its members through public Co-ops must finance their projects mainly through the market. The level of self-financing, or the so-called Anteilkapital (members’ share capital), must reach at least 1 See www.stadt-zuerich.ch/fd/de/index/wohnen-und-gewerbe/baurecht.html. 6%. Some banks have worked with housing cooperatives 2 See www.admin.ch/opc/de/classified-compilation/20010522/index.html. for many years and trust the financing model. Therefore, 3 See www.wbg-zh.ch. relations and political lobbying. It also tries to find land Subsidies to maintain affordability case studies for non-profit housing by acquiring real estate. The co-ops Subsidized apartments are reserved for people with low themselves are organized differently; some, especially income and no wealth. Co-ops often combine subsidized 109 the large, young ones, are quite professional, while others apartments with other kinds in a single project, applying are completely self-managed by the members on a low the same standards to all the apartments. professional level. The canton of Zurich practises object-financing There is no public or subsidized institution that supports (Objektfinanzierung), instead of subject-financing new co-ops. Co-ops are organized under an umbrella (Subjektfinanzierung). Interest-free or lowinterest loans organization, the Wohnbaugenossenschaften Schweiz. The are given to the co-op, thus reducing the rent of subsidized organization is divided into regional sections. More than apartments (by about 25%). 1,100 housing cooperatives and other non-profit housing developers with a total of just over 150,000 apartments are To get these loans, the co-ops must fulfil numerous members of the association. conditions: they have to build all apartments (even the non- subsidised ones) following a strict investment cost budget Access and management (which includes the land price); they must meet minimum sizes and build obstacle-free buildings; and the loans Regulations on access to the cooperative housing stock must be secured by mortgage bonds with the respective Many co-ops aim for a wide social mix in their projects. qualification. Therefore, they work together with organizations that offer sheltered housing, working facilities for disabled Residents must meet subsidy conditions: they must have a people, help to refugees and children or assistance to very low income (as compared to the Swiss average) and no people that have no chance in the housing market (often wealth. This is monitored annually by the municipality. If migrants or large families). This is a win-win situation: the conditions are no longer met, the co-op has to change the organizations guarantee rent and pay shares and get the status of the apartment and subsidize another. affordable apartments that meet the needs of their clients, who live in mixed neighbourhoods. Since co-op administrative expenses are quite high, many co-ops only subsidize when they are forced to (for example, A lot of co-ops have also established internal solidarity due to a land lease contract). The other difficulty is that the models that are widely accepted by members. These prerequisite for a cantonal loan is an equivalent municipal models often replace the official cantonal subsidizing of payment. However, depending on their government, some rents. municipalities do not support subsidized housing. case studies In Switzerland, housing is primarily provided via the Rent in non-profit housing construction market. Regarding subsidized housing, there is no national Calculation of the maximum annual rent 110 standardized model. Moreover, cooperative housing is not (‘General rule’, in accordance with the Municipal Rent Rule Art. 2ff.) the same as subsidized or social housing, though some Investment costs × interest* = capital costs projects include subsidized apartments. *Federal Housing Office (BWO) reference rate

There are subsidy programmes for people with low income, Building value × operating fee* = operating costs** but cantons and municipalities are responsible for that. *Defined in the Zurich rent regulations (Mietzinsreglement) with a maximum of 3.25% Thus, the programs vary widely. For example, in Zurich, **Includes operating costs, amortization and only between 7,000 and 220,000 households are subsidized a provision for future investments in the building in total (balance at end 2016). Capital costs + operating costs = maximum rent Maintenance of the model over time Co-ops cannot sell or buy land or real estate without a Regulations on housing equity and the commodification vote from their members and, often, a 2/3 majority is of dwellings needed. If a co-op breaks up, the municipality or the All Zurich housing cooperatives are subject to municipal canton has a pre-emption right. The members cannot pull rent regulations, or the so-called cost rental model. This out more capital than their equity, and it must be used means that the rent must be exactly enough to cover to fulfil the original purposes of the co-op (based on the the expenses of the cooperative. The cost rent is used to Wohnraumförderungsverordnung of 26 November 2003). pay debt interest and administrative costs, ensure the Therefore, the Swiss model for non-profit housing co-ops maintenance and value preservation of the properties, and guarantees the long-term elimination of land and real renew and update them. In the mid- to long-term, the cost estate speculation. rental model results in significantly lower rents than those for comparable properties on the housing market.

Co-ops also have to satisfy many other conditions concerning depreciation and amortization. To manage this, the city generally nominates one member from the co-op’s managing board and reviews the annual accounts.4 4 See www.stadt-zuerich.ch/portal/de/index/politik_u_recht/amtliche_sammlung/ inhaltsverzeichnis/8/841/170/170-reglement-ueber-das-rechnungswesen-der-von-der- stadt-zuerich.html. References case studies

Schweizenischer Verband für Wohnungswesen / Association Suisse pour l’Habitat (SVW/ ASH) (2012) «Wohnbaugenossenschaft und Gemeinnützigkeit». 111 Schmid, P. (2005) Die Wohnbaugenossenschaften der Schweiz, Zurich: University of Friburg.

Chaney, A. et al. (2012) Baurecht unter der Lupe, Schlussbericht, Grenchen: BWO. case studies

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COVIAM: Cooperativa de Vivienda Ana Monterroso. It was one of the first projects to reuse an old building of the center of Montevideo. Source: Jerónimo Díaz (Flickr) Uruguay case studies Lorenzo Vidal 113

Introduction and context User housing cooperativism began to spread in Uruguay Based on the most recent data available, in 2011, Uruguay following the approval of the National Housing Act (Act had approximately 30,000 cooperative homes, representing no. 13,728) Section 10 of this act defines and regulates the 2.58% of the country’s housing stock (INE 2011). Over basic characteristics and main aspects of cooperatives. At recent years, however, the rate of formation of new the same, the act established a larger regulatory, financial cooperatives has picked up steam (MVOTMA, 2015). and administrative framework that cooperatives are The country has two right-to-use housing cooperative subject to as well. Today, it remains the legal basis for the models: the mutual-aid housing cooperative is the most entire housing sector despite subsequent amendments. widely spread model and is based on collective self- Moreover, in 2008, the Cooperatives Act (Act no. 18,407 and building. It does not require a significant amount of initial 19,181) was approved. This piece of legislation sets forth capital. Most cooperatives of this kind form part of the the regulation, foundation, organization and operation of Uruguayan Federation of Mutual-Aid Housing Cooperatives the different types of cooperatives in Uruguay, including (FUCVAM). The second model is known as the prior- housing cooperatives. Under this framework, housing savings housing cooperative. In this case, members are cooperatives can access public loans through the Ministry required to contribute initial capital representing 15% of of Housing and the National Housing Agency (ANV). They the cost of the project and professional builders are hired. can also purchase public property and land available in These cooperatives are grouped together in the Federation the land portfolios, at the national and municipal levels. of Housing Cooperatives (FECOVI). The main differences Moreover, members of cooperatives can also access between these two models are the initial capital required subsidies for their monthly fees if they represent more than and the method of building. 25% of their household’s liquid income. In return, the law case studies regulates the transfer of housing and prohibits the purchase the different types of housing developers that can apply and sale thereof at market prices. for these calls, priority is given to cooperatives, which 114 can obtain up to 50% of total allocations (Mendive 2013). The development of housing cooperativism has taken Their proposals are evaluated by technicians from the various twists and turns over the course of the country’s National Housing Directorate. Allocation criteria are based history. The favourable legal and institutional framework on the cooperative’s urban and architectural proposal as set forth in the National Housing Act in 1968 enabled the well as its dynamic and stability over time, which includes sector to grow rapidly. However, this supportive structure group heterogeneity, social and educational activity and was severely interrupted by the dictatorship that took hold the seniority of the project. A similar “portfolio” has been of the country from 1973 to 1985. The later transition to a established at the municipal level, especially in the capital, parliamentary democracy evolved under the framework of Montevideo. ongoing neoliberalism that stripped the law of the material resources needed to fully reactivate cooperativism. It Access to financing wasn’t until the 1990s, when the progressive party Frente Since 1992, newly founded cooperatives are directly Amplio won the elections first in Montevideo and then at financed by the Ministry of Housing and, since 2007, they the national level in the following decade, that institutions are managed by the recently created National Housing slowly began considering cooperativism once again. Thus, Agency (ANV 2019). Once cooperatives have been allocated the creation of cooperatives came to its tipping point in the land or property and their project has been approved, period just before the dictatorship and is today recovering they can access financing by participating in the lotteries its strength. Housing cooperatives are considered another organized by the Ministry of Housing twice yearly. If a pillar of the public housing system and receive state aid and cooperative applies for the lottery for the third time, it is resources because they make progress in the objectives of automatically allocated a loan. “social integration, solidarity, participant empowerment and a multi-disciplinary approach to the housing problem” These loans cover 85% of the total cost of the cooperative (MVOTMA 2015: 22). project. The cooperative can cover the remaining 15% of capital through cash contributions or, alternatively, Cooperative housing production by supplying 21 hours of work per week during the construction phase of the buildings. Access to land and buildings Cooperatives interested in purchasing public land and/ Direct subsidies or property can submit their proposal to regular calls Direct subsidies for cooperatives are included in access held by the Ministry of Housing (MVOTMA n.d.). Among to public land and property at prices lower than market value and, varyingly, in relatively favourable conditions of Maintenance of the model over time case studies mortgages granted. Regulations on housing equity and the commodification 115 Indirect subsidies of dwellings Moreover, as regards indirect subsidies, user cooperatives Housing cooperatives are designed to be used by members are exempt from all real estate taxes.1 as their main residence. Therefore, subleasing housing to third parties, for example, is prohibited by law and is Technical support sufficient grounds for expulsion from the cooperative.4 The law governs the so-called Technical Assistance Institutes (IAT), which are multidisciplinary non-profit The transfer of housing use is linked to purchasing the teams. Groups that opt for public land and loans are so-called “social share” of a cooperative member. This obligated to hire support of this kind, but the cost of their social share includes the member’s initial contribution and services cannot exceed 5% of the total cost of the project.2 the fees they have paid for the mortgage loan, but does not include interests paid.5 Nor does it include the portion of Access and management the monthly fee that covers the cooperative’s administration and maintenance expenses or other common expenses. Subsidies to maintain affordability In short, members only capitalize on the effort they have The National Housing Agency provides individual invested in housing production and not its patrimonial subsidies for monthly mortgage payments. This subsidy value on the market. is understood to be a guarantee of residents’ right to remain. If the monthly fee represents more than 25% of a household’s liquid income, it may request a subsidy to cover the difference between the total fee and 25% of its income. If the household’s total income falls under the official 1 Cooperative System Act, No. 18.407, Chap. 143. legislativo.parlamento.gub.uy/temporales/ definition of poverty or extreme poverty, this subsidy leytemp3155682.htm. is increased until the fee represents 14% or 8% of total 2 National Housing Plan, No. 13.728, Chap. 174. legislativo.parlamento.gub.uy/temporales/ income, respectively (ANV 2012). leytemp3169923.htm. 3 DINAVI, Resolution A.D, No. 168/2017. www.mvotma.gub.uy/images/RMI_168-2017.pdf. There is also a specific line of credit that finances 85% 4 National Housing Plan, No. 13.728, Chap. 151. legislativo.parlamento.gub.uy/temporales/ of the initial costs of entry of new members to already leytemp3169923.htm. 5 Foundation and functioning of cooperatives No. 19.181, Chap. 139. legislativo.parlamento. established cooperatives under conditions similar to those gub.uy/temporales/leytemp2487934.htm borne by the founding members.3 case studies As for the possibility of moving from a user cooperative to horizontal property, the law requires a special majority of 116 75% of votes in favour by the cooperative assembly.6

The regulations also establish where any remaining amount must end up should a cooperative go bankrupt. In such cases, once debts have been paid off and ‘social shares’ have been returned to members, any remaining amount is transferred to the National Institute for Cooperativism (INACOOP).7

References

Ministerio de Vivienda, Ordenamiento Territorial y Medioambiente (MVOTMA) (s.d.) «Llamado Anual a cooperativas sin terreno»: www.mvotma.gub.uy/programas- permanentes-por-postulacion/construir/cooperativas/llamado-anual-a-cooperativas-sin- terreno.

Mendive, C. (2013) Cartera de Inmuebles de Vivienda de Interés Social (CIVIS): Alternativas para la provisión de suelo en Uruguay, Lincoln Institute of Land Policy: www. lincolninst.edu/sites/default/files/pubfiles/mendive-wp14cm2sp-full_0.pdf.

ANV (Agenda Nacional de Vivienda) (2019) Programa Cooperativas: www.anv.gub.uy/grb/ contenido.aspx?id_contenido=495.

ANV (Agenda Nacional de Vivienda) (2012) «Subsidio a la Permanencia»: www.anv.gub. uy/archivos/2012/09/COOP_Instructivo_para%20solicitud_de%20subsidio.pdf.

6 Foundation and functioning of cooperatives, No. 19.181, Chap. 33. legislativo.parlamento. gub.uy/temporales/leytemp2487934.htm

7 Cooperative System Act, No. 18.407, Chap. 97. legislativo.parlamento.gub.uy/temporales/ leytemp2440491.htm. case studies

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